BANCROFT 
LIBRARY 

-o- 

THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 


REPORT 


OF 


NICARAGUAN  MIXED  CLAIMS 
COMMISSION 


REPORT 


OF 


NICARAGUAN  MIXED  CLAIMS 
COMMISSION 

TRANSMITTED  WITH  REPORT  OF  ITS  PRESIDENT 

TO  THE 

SECRETARY  OF  STATE  OF  THE 
UNITED  STATES 

OTTO  SCHOENR1CH,  PRESIDENT 

CARLOS  CUADRA  PASOS  ARTHUR  R.  THOMPSON 

P10  BOLANOS,  SECRETARY 


(037BO 


INDEX. 


Page. 

Report  of  Otto  Schoenrich,  President  of  the  Nica- 
raguan  Mixed  Claims  Commission  to  Honorable 
William  J.  Bryan,  Secretary  of  State  of  the 

United  States    3 

English  translation  of  report  presented  by  the  Nica- 
raguan  Mixed  Claims  Commission  to  the  Presi- 
dent of  Nicaragua,  don  Adolf o  Diaz 7 

I.  Summary  of  the  work  of  the  Mixed  Com- 
mission     9 

II.  Origin  of  the  Nicaraguan  Mixed  Claims  Com- 
mission    16 

III.  Organization  of  the  Commission 18 

IV.  Laws  and  Decrees  relative  to  the  Commission .  20 
V.  Rules  of  Procedure  of  the  Commission 23 

VI.  Status  of  the   Commission    28 

VII.  Proceedings   of   the   Commission 31 

VIII.  Work  accomplished  by  the  Commission 37 

1.  Concessions  and  contracts 39 

(a)  Concessions  compromised 39 

(b)  Concessions  declared  lapsed  up- 
on suit  of  Government 43 

(c)  Concessions    and    contracts    on 
which  claims  were  based 44 

2.  War  Claims 58 

(a)  War  Claims  of  1893  to  1909. . .  67 

(b)  War  Claims  of  1909  to  1910.  .  67 

(c)  War  Claims  of  1912 69 

3.  Claims  for  denial  of  justice 71 

4.  Miscellaneous  claims . .  7SP 


IX.   Payments  made  by  the  Commission 

X.  Payment  of  the  remaining  awards 

X I .   Records  of  the  Commission 

Nil.   G  inclusion    80 

English  translation  of  letter  of  acknowledgement  ad- 
dressed by  Sr.  don  Adolfo  Diaz  to  Otto  Schoen- 
rich,  President  of  the  Nicaragua!!  Mixed  Claims 

Commission 8 

Appendix  I.       Laws  referring  to    the    Mixed    Claims 
Commission  and  Rules  of  Procedure  o 
the  Commission. 

Appendix  II.  List  of  Judgments  rendered  by  the  Ni 
araguan  Mixed  Claims  Commissio 
showing  payments  made. 

Appendix  III.    Accounts  of  payments  made  by  the  Ni 
araguan  Mixed  Claims  Commission. 
A.   Summary  of  accounts  of  payments  made  by  tl 

Mixed  Commission. 

P>.  Table  No.  1.     Summary  of  warrants  sent  to  t 
Department  of  Finance. 

C.  Table  No.  2.     Amounts  returned  to  the  gene 

fund. 

D.  List  of  warrants  sent  to  the  Department  of  Fi 

nance,  and  of  payments  made. 


u 


WASHINGTON,  January  20,  1915. 

HONORABLE  WILLIAM  J.  BRYAN, 
Secretary  of  State, 

Washington,  D.  C. 

SIR:— 

In  the  month  of  March,  1-911,  I  had  the  honor  to  be 
designated  by  the  Department  of  State  of  the  United 
States  as  president  of  the  Nicaraguan  Mixed  Claims  Com- 
mission. After  constant  and  arduous  work  the  Commis- 
sion has  now  concluded  its  labors  and  has  rendered  its 
final  report  to  the  President  of  Nicaragua. 

I  transmit  herewith  a  copy  and  a  translation  of  the 
said  final  report.  The  report  contains  an  epitome  of  the 
work  accomplished ;  statistical  tables  relating  thereto ;  an 
account  of  the  origin,  organization,  status,  rules  and  pro- 
ceedings of  the  Commission ;  a  review  of  the  various 
classes  of  claims  based  on  the  cancellation  or  violation 
of  concessions  and  contracts,  on  damages  caused  by  war, 
and  on  other  grounds ;  and  a  statement  of  the  claims  paid 
through  the  Commission.  To  the  report  are  appended 
a  copy  of  the  laws  creating  the  Commission  and  of  the 
Rules  of  Procedure  of  the  Commission,  a  list  of  the 
7,911  judgments  rendered  by  the  Commission,  and  an 
account  of  the  claims  paid  through  the  Commission. 

I  also  transmit  a  copy,  with  translation,  of  a  letter 
addressed  to  me  by  the  President  of  Nicaragua,  under 
date  of  November  23d,  1914,  in  which  he  expresses  his 
high  appreciation  of  the  work  accomplished  by  the  Com- 
mission. 

I  further  transmit  a  copy  of  each  of  the  7,911  judg- 
ments rendered  by  the  Commission.  They  are  in  Span- 
ish, in  which  language  all  the  proceedings  of  the  Com- 
mission were  held,  but  eight  of  them  are  accompanied  by 
an  English  translation.  The  first  name  appearing  under 
each  judgment  indicates  which  one  of  the  Commissioners 
drafted  the  respective  opinion.  • 


The  various  documents  so  transmitted  will  afford  an 
idea  of  the  work  of  the  Commission.  It  is  proper  to  re- 
fer especially  to  the  remarkable  fact  that  all  the  judg- 
ments were  rendered  by  the  unanimous  vote  of  the  three 
Commissioners. 

In  connection  with  the  report  of  the  Mixed  Claims 
Commission,  I  have  the  honor  to  make  two  recommenda- 
tions. One  pertains  to  the  fund  for  the  payment  of  the 
smaller  claims.  About  the  end  of  1913,  a  fund  which 
ultimately  amounted  to  $158,548.00  was  set  aside  for 
the  payment  of  the  smaller  awards  of  the  Commission. 
This  sum  was  placed  in  trust  subject  to  the  direction  of 
the  Secretary  of  State  of  the  United  States  and  the 
attorney  for  Nicaragua  in  Washington,  and  in  accordance 
with  their  instructions,  the  Commission  made  payments 
t<>  the  amount  of  $1 57, 700.77,  as  explained  in  the  report. 
\o  accounting  between  the  National  Bank  of  Nicaragua 
and  the  Commission  has  been  possible,  because  checks 
were  issued  up  to  the  last  moment  and  many  had  not  been 
presented  at  the  bank  for  payment  when  the  Commission 
ended  its  sessi<  »ns.  I  beg  to  recommend  therefore  that  the 
Secretary  of  State  and  the  attorney  for  Nicaragua  in 
Washington  instruct  the  National  Bank  of  Nicaragua  to 
have  an  accounting  with  the  Government  of  Nicaragua 
with  reference  to  the  fund  for  the  payment  of  awards  o 
the  Mixed  Claims  Commission,  within  a  reasonable  time, 
,  by  May  1st.  1!H.">.  and  that  any  balance  then  remain- 
ing in  such  fund  be  turned  over  to  the  Government  of  Ni 

tia. 

My  other  recommendation  pertains  to  the  claims  pend- 
ing payment  and  which,  as  will  appear  from  the  report, 
6  in  number  and  amount  to  SI .('.;  1. 1^.1  •">.     When 
the  Commission  was  organixed.  the  Nicaraguan  Govern- 
ment  was  encouraged  by  the   American  Government  to 
•hat  the  treaty  between  Nicaragua  and  the  United 
.vhich  lias  been  pending  in  one   form  or  another 
(HI,    would   be   ratified    promptly   by   the    United 
ml  that    Nicaragua  could   then   look   for- 
d  to  peace  in  the  future  and  make  a  loan  which  would 


provide  funds  for  the  payment  of  our  awards  and  other- 
wise assist  in  the  financial  and  economic  rehabilitation 
of  the  country.  The  treaty  has  never  been  ratified,  and 
as  a  result  the  position  of  the  Claims  Commission  lias 
been  embarrassing  and  painful,  the  Nicaraguan  Treasury 
has  been  gasping  in  a  condition  of  chronic  deficit,  the 
financial  and  economic  state  of  the  country  has  become 
indescribably  bad,  and  the  turbulant  element  has  pro- 
voked one  civil  war  and  is  constantly  plotting  for  an- 
other. For  the  prestige  of  the  United  States  Govern- 
ment as  well  as  of  the  Nicaraguan  Mixed  Claims  Com- 
mission, for  the  relief  of  our  trusting  friends  in  the 
Nicaraguan  Government,  for  the  assistance  of  the  suf- 
fering Nicaraguan  people,  for  the  mutual  advantage  of 
Nicaragua  and  the  United  States,  and  for  the  furtherance 
of  peace  and  civilization  in  Central  America,  1  earnestly 
recommend  that  every  effort  be  made  to  secure  imme- 
diate ratification  by  the  United  States  Senate  of  the  pend- 
ing Nicaragua  Canal  Treaty  and  of  provisions  extending 
to  Nicaragua  benefits  similar  to  those  of  the  "Platt 
Amendment." 

For  further  information  with  regard  to  the  work  of 
the  Commission,  I  beg  to  refer  to  my  communications 
to  the  Department,  of  June  2d,  December  12th,  and  De- 
cember 19th,  1913,  and  of  January  4th,  191  r>. 

I  have  the  honor  to  be,  sir,  your  obedient  servant, 

OTTO  SCHOENRICH. 


6 


DOCUMENTS  TRANSMITTED. 

, 

Exhibit  No.  1.  English  translation  of  Report 
sented  by  the  Nicaraguan  Mixed  Claims  Commission  to 
the  President  of  the  Republic  of  Nicaragua,  don  Adolfo 
Diaz.  With  appendices. 

Exhibit  No.  2.  English  translation  of  letter  dated  No- 
vember 23,  1914,  from  Sefior  Don  Adolfo  Diaz,  Presi- 
dent of  Nicaragua,  to  Otto  Schoenrich,  President  of 
Nicaraguan  Mixed  Claims  Commission. 

Exhibit  No.  3.  Spanish  copy  of  Report  presented  by 
the  Nicaraguan  Mixed  Claims  Commission  to  the  Presi- 
dent of  Nicaragua,  don  Adolfo  Diaz.  With  appendices 
in  full. 

Exhibit  No.  4.     Spanish  copy  of  letter  dated  Novem- 
ber 23,  1914,  from  Sefior  Don  Adolfo  Diaz,  President 
of  Nicaragua,  to  Otto  Schoenrich,  President  of  Nicara 
guan  Mixed  Claims  Commission. 

Exhibit  No.  5.  Spanish  copy  of  circular  letter  of  De 
cember  9,  1911,  issued  by  Department  of  Foreign  Af 
fairs  of  Nicaragua,  relative  to  Nicaraguan  Mixed  Claim 
Commission. 

Exhibit  No.  6.     Memorandum  of  wars  and  civil  di 
turbances  of  Nicaragua  since  1893. 

Kxhibit  Xo.  7.  Extract  from  message  of  President 
Diaz,  December  15, 1914,  in  Spanish  with  English  transla- 
tion. 

Exhibit  No.  8.  Spanish  copies  of  the  7,911  judg- 
ments rendered  by  the  Nicaraguan  Mixed  Claims  Com- 
mission, with  English  translation  of  eight  judgments. 


EXHIBIT  No.  1 
ENGLISH  TRANSLATION 

OF 

REPORT 

PRESENTED    BY    THE 

NICARAGUAN  MIXED  CLAIMS  COMMISSION 

TO    THE 

PRESIDENT  OF  THE  REPUBLIC  OF  NICARAGUA 
DON  ADOLFO  DIAZ 


9 


( Translation) 
NICARAGUAN  MIXED  CLAIMS  COMMISSION. 

MANAGUA,  November  24th,  1914. 
His  EXCELLENCY,  DON  ADOLFO  DIAZ, 
President  of  the  Republic, 

Managua. 

The  Nicaraguan  Mixed  Claims  Commission  has  the 
honor  to  present  to  your  Excellency  the  following  re- 
port with  reference  to  its  labors. 

I.  SUMMARY  OF  THE  WORK  OF  THE  MIXED  COMMISSION. 

The  total  number  of  cases  filed  with  the  Commission 
was  7,911.  Of  these  cases  three  were  suits  entered  by 
the  Government  of  Nicaragua  against  concessionaries 
who  had  failed  to  comply  with  their  contracts,  and  the 
other  7,908  cases  were  claims  presented  against  the  Gov- 
ernment of  Nicaragua. 

In  the  three  suits  filed  by  the  Government  anullrnent 
was  requested,  for  non-compliance  with  conditions,  of  a 
concession  for  the  sale  of  land  bonds;  of  a  concession 
relating  to  the  dredging  of  the  bar  at  the  mouth  of  the 
Rio  Grande  and  the  construction  of  a  wharf;  and  of  a 
concession  for  railroad  construction  between  Matagalpa 
and  the  Atlantic  Coast.  These  three  cases  were  decided 
by  the  Commission  in  favor  of  the  Government. 

In  the  7,908  claims  the  total  amount  claimed  was  C$13,- 
808,161.00  and  the  Commission  awarded  a  total  amount 
of  C$1,840,432.31.  It  should  be  noted  that  the  claims 
were  presented  in  different  kinds  of  money,  but  that 
almost  all  the  awards  were  expressed  in  cordobas,  ex- 
cept a  few  which  were  given  in  gold.  For  the  purposes 
of  the  awards  of  the  Commission,  of  this  report  and  of 
the  statistics,  a  cordoba  (C$1.00)  is  estimated  as  equiva- 
lent to  one  dollar  American  gold,  to  $2.50  silver,  and  to 
$12.50  national  paper  currency.  The  rate  of  exchange 
at  which  other  coins  were  calculated  is  expressed  in  the 
respective  awards. 

The  majority  of  the  7,908  claims  were  for  small  sum$ 
as  can  be  seen  from  the  following  table : 


10 

TABLE  I 
CLAIMS 

FILED  WITH  THE 

NICARAGUA   MIXED   CLAIMS   COMMISSION 
classified  according  to  amount  claimed. 


Claims  of 

No.  of 
claims 

Total  claimed 

Total 
awarded 

C$100  or  less            

4,536 

C$163,839.13 

C$98,210.47 

C$100  01  to  C$500 

2072 

488,971  63 

200  910  59 

C$500  01  to  C$1,000  

501 

360,005.32 

113,661.33 

C$1,000.01   to   C$100,000... 
Over  C$100000 

787 
12 

4,090,517.14 

8,704,827.78 

638,294.92 
789  355  00 

Total    

7,908 

C$13,808,161.00 

C$1,840  432.31 

The  greater  portion  of  the  awards  of  the  Commission 
was  also  for  small  sums.  The  following  table  gives  de- 
tails with  reference  to  the  size  of  the  awards  of  the 
Commission: 


11 

TABLE  II 
JUDGMENTS 

RENDERED  BY  THE 

NICARAGUAN   MIXED   CLAIMS  COMMISSION 
classified  according  to  amount  awarded. 


Judgments 

No.  of 
judg- 
ments 

Total  claimed 

Total 
awarded 

In   cases    rejected   or   dis- 
missed       

661 

C$4,772.809.12 

Awards  of  C$100  or  less.. 
100.01         to 
C$500              

5,638 
1,252 

504,079.11 
1,018,271.37 

C$175,827.37 
283,649.08 

Awards     of     C$500.01     to 
C$1  000  

201 

486,009.21 

150,039.06 

Awards    of    C$1,000.01    to 
C$100  000 

153 

3,507,607.14 

550,641.80 

Awards     of     more    than 
C$100  000              

3 

3,519,385.05 

680,275.00 

Total        

7,908 

C$13,808,161.00 

C$1,840,432.31 

The  great  majority  of  claimants  were  Nicaraguans, 
but  the  sums  claimed  by  American  citizens  amounted 
to  more  than  the  claims  of  all  other  persons  together. 
With  the  exception  of  American  citizens,  very  few  for- 
eigners addressed  themselves  to  the  Commission,  but  as 
the  Commission  was  charged  with  revising  the  awards 
of  local  Boards  of  Exactions,  it  decided  many  foreign 
claims  which  had  been  filed  with  such  Boards.  The  fol- 
lowing table  shows  details  with  reference  to  the  nation- 
ality of  the  claimants: 


12 

TABLE  III 
NATIONALITY  OF  CLAIMANTS 

in  claims  filed  with  the 
NICARAGUAN   MIXED  CLAIMS   COMMISSION 


Nationality  of  claimant 

No.  of 
claims 

Total  claimed 

Total 
awarded 

1  Nicaraguan  

7,491 

C$5,491,533.13 

C$1,217,650.43 

2  British 

149 

152,540.56 

24,426.82 

"}  American 

66 

7  576,564  13 

538,749.71 

4  German    

34 

49,173.92 

16,692.99 

5  Chinese          

28 

37,796.93 

5,565.52 

6  Italian 

25 

139,510.97 

9,032.31 

7  Spanish 

21 

135  348  54 

2  697  46 

8  French   

20 

34,834.13 

5,958.80 

9  Colombian              

17 

38,553.52 

3,160.00 

10  Honduran 

13 

12  916  42 

68240 

11  Turkish    

9 

6,417.83 

1,312.83 

12  Salvadorian    

7 

4,116.14 

49700 

13  Costa  Rican 

5 

42  078  80 

1  576  00 

14  Mexican 

4 

2  736  88 

257  00 

15  Dutch    

4 

844.52 

67056 

16  Austro-Hungarian  
17  Panamanian 

3 
3 

12,205.67 
10  173  80 

1,174.88 
8  109  60 

18  Danish 

2 

640  00 

150  00 

I'J  Swiss    

1 

35  000  00 

20  Guatemalan          

1 

16  000  00 

21  Ecuadorian 

1 

4  192  00 

800  00 

22  Belgian 

1 

2  585  59 

700  00 

23  Cuban    

1 

1  859  52 

20000 

~4  Kervotian    . 

1 

29000 

280  00 

25  Venezuelan 

1 

248  00 

88  00 

Total    

7908 

C$13  808  161  00 

C$1  840  432  31 

(NOTE— When  a  claim  belongs  to.  persons  of  different  nation- 
alities, it  is  classified  according  to  the  nationality  of  the  largest 
owner.) 


13 


From  table  III  the  following  percentages  are  derived : 

TABLE  IV 
AVERAGES  OF  NATIONALITIES 

in  claims  filed  with  the 
NICARAGUAN  MIXED  CLAIMS  COMMISSION. 


Nicaraguans 

Americans 

Foreigners 
other  than 
Americans 

Proportion  of  the  num- 
ber   of    their    claims 
with   respect   to   total 
number  of  claims  filed 
Proportion    of    amount 
claimed  by  them  with 
respect      to       total 
claimed   before   Com- 
mission   

95% 
M-ft% 

1% 
55% 

4% 

5% 

Proportion    of    amount 
awarded     them     with 
respect  to  total  award- 
ed by  Commission... 
Proportion    of    amount 
awarded     them     with 
respect      to      amount 
claimed  by  them 

66% 
222% 

29% 

7.1% 

5% 
12.7% 

It  should  be  observed  that  in  the  preceding  tables,  as  in 
the  others  presented  by  the  Commission,  there  are  in- 
cluded as  well  the  claims  dismissed  on  motion  of  claim- 
ants as  those  decided  on  the  merits  of  the  case.  From 
the  preceding  table,  it  will  be  seen  that  American  claim- 
ants received  a  much  smaller  sum  in  proportion  to  the 
amount  claimed,  than  other  foreigners  or  Nicaraguans. 
The  reason  for  the  difference  consists  in  the  fact  that 
almost  all  the  important  American  claims  were  based^ 
on  the  cancellation  of  illegal  concessions  and  included 


14 


large  items  for  estimated  future  profits,  which  items 
were  rejected  by  the  Commission,  while  claims  of  other 
foreigners  and  of  Nicaraguans  were  almost  in  their  en- 
tirety war  claims  and  in  the  majority  of  such  claims  the 
question  was  only  one  of  valuation  of  the  losses. 

The  greater  number  of  claims  was  based  on  losses  and 
damages  suffered  during  various  wars  in  Nicaragua.  The 
number  of  claims  founded  on  the  cancellation  or  viola- 
tion of  concessions  and  contracts  was  small,  but  their 
amount  exceeded  that  of  the  war  claims.  The  follow- 
ing table  shows  the  different  classes  of  claims  : 

TABLE  V 
NATURE  OF  CLAIMS 

filed  with  the 
NICARAGUAN  MIXED  CLAIMS  COMMISSION. 


Nature  of  claim 

No.  of 
claims 

Total  claimed 

Total 
awarded 

War  claims  of  1893  to  1909 
War  claims  of  1909  to  1910 
War  claims  of   1912 

181 

:,.:;:'.» 
2  2.">7 

C$755,019.62 
1,495,776.32 
2  050  523  11 

C$73,194.65 
495,705.17 
405  766  61 

Cancellation     or     violation 
of  concessions  and  con- 
tracts 

18 

8  813  927  71 

813  275  00 

Denial  of  Justice 

3 

99  712  32 

°50  00 

Miscellaneous    

70 

593  201  92 

52  240  88 

Total    

7,908 

C$13,808,161  00 

C$1  840  432  31 

(  N'OTK — When  a  claim  comprises  several  items,  it  is  classified 
according  to  the  nature  of  the  most  important  item.) 

l;n>m  the-   foregoing,   it   will   appear  that   the  amount 

awarded  by  all  the  judgments  of  the  Commission  is  C$1,- 

81.      In   the  be^innin^  of  the  present  year  the 

^Commission  was  assigned  a   sum  of  C$158,548.00   for 


15 


the  payment  of  small  claims.  Of  this  sum  C$847.23  lias 
been  reserved  for  commissions  of  the  National  Bank  and 
with  the  remainder,  C$157,700.77,  the  Mixed  Commission 
has  paid  or  has  issued  checks  for  the  payment  of  4,618 
claims.  As  the  Commission  paid  only  small  claims,  the 
claimants  in  84  cases  voluntarily  reduced  the  amount  <>i~ 
their  awards  in  order  that  they  might  receive  payment, 
and  the  sum  which  was  thus  saved  to  the  Government 
amounted  to  C$2,787.89.  The  Commission  is  also  ad- 
vised that  at  least  13  claims  have  been  paid  or  settled 
directly  by  the  Government.  The  state  of  the  debt  «>f 
the  Government  of  Nicaragua,  on  account  of  the  awards 
of  the  Mixed  Commission,  will  appear  from  the  follow- 
ing table : 

TABLE  VI 
CLAIMS  PAID  AND  PENDING  PAYMENT. 


No.  of 
claims 

Amount  paid 
or  owing 

Claims  rejected  or  dismissed 

661 

Claims  paid  by  Commission  

4,618 

C$157,700.77 

Claims  paid  or  settled  by  Government  
Claims  pendincr  payment 

13 
2616 

5.821.52 
1  674  122  13 

Amount  renounced  in  84  claims  in  order 
to  secure  payment                   

2,787.89 

Total                 

7,908 

C$1,840,432.31 

It  is  thus  evident  that  the  Government  of  Nicaragua 
continues  to  owe  on  account  of  the  awards  of  the  Mixed 
Commission,  the  sum  of  C$1,674,122.13  on  2,616  claims. 
Even  this  sum  is  subject  to  a  small  reduction,  because, 
under  the  compromise  in  the  case  of  the  wharf  of  San 
Juan  del  Sur,  the  debt  decreases  in  each  month,  and  be- 
cause it  is  possible  that  more  claimants  have  been  paid 
by  the  Department  of  Finance. 


16 


II.  ORIGIN  OF  THE  NICARAGUAN  MIXED  CLAIMS 
COMMISSION. 

After  the  fall  of  the  Governments  of  Zelaya  and 
Madriz  in  Nicaragua,  the  new  Government  which  came 
into  power  in  September,  1910,  as  a  result  of  the  Revo- 
lution of  October  11,  1909,  found  among  the  many  prob- 
lems confronting  it  a  heavy  internal  debt  and  an  enor- 
mous number  of  claims  pending  against  a  bankrupt  treas- 
ury. The  claims  were  principally  war  claims,  arising  in 
the  various  civil  commotions  to  which  Nicaragua  had 
been  a  prey,  and  especially  in  the  Revolution  that  had  just 
ended.  Further,  during  the  Zelaya  regime,  the  country 
had  been  plastered  with  concessions  which  were  regarded 
as  unconstitutional,  illegal  and  burdensome  monopolies, 
and  of  which  many  were  held  by  foreigners.  The  liqui- 
dation of  the  claims  and  the  cancellation  of  illegal  con- 
cessions were  necessary  incidents  in  the  task  of  rehabilitat- 
ing the  financial  and  economic  condition  of  the  country. 

In  the  conferences  held  in  November,  1910,  between 
Charge  d'Affaires  T.  C.  Dawson,  representing  the  United 
States,  and  Nicaraguan  authorities,  as  to  the  most  effi- 
cient method  of  securing  a  stable  government  for  Nic- 
aragua and  reconstructing  the  country's  finances  and 
economic  situation,  it  was  determined  that  Nicaragua 
was  to  contract  a  loan  for  the  purpose  of  funding  her 
debt,  placing  her  finances  upon  a  sound  basis,  and  other- 
wise promoting  the  prosperity  and  progress  of  the  coun- 
try. It  was  also  determined  that  the  claims  arising  out 
».f  the  cancellation  of  concessions  should  bo  passed  on 
by  a  Mixed  Commission,  appointed  by  the  Nicaraguan 
ernmcnt  in  accord  with  the  American  Government. 

In  the  note  datod  November  10th,  I'.UO,  and  addressed 
by  the  Minister  of  Foreign  Affairs  of  Nicaragua,  Mr. 
Tomas  Martinez,  to  Charge  d'Affaires  Dawson.  the  fol- 
lowing paragraphs  appear: 

"The  principal  obstacle  to  reorganization   lias  been   found  in  the 

nt   of   Finance,   which  was  debilitated  by  the  abuses  com- 

mitu-d  therein  by  the  Governments  of  General  Zelaya  and  Dr.  Ma- 


17 


driz.  An  important  cause  of  this  ruin  consists  in  the  illegal  conces- 
sions granted  for  private  gain  and  to  the  detriment  of  the  public  in 
general  and  of  national  prosperity.  Foreigners  have  participation  in 
these  contracts;  and  the  Government,  which  will  tend  to  destroy  all 
these  illegalities,  may  find  difficulties  in  the  distrust  with  which  the 
Governments  of  such  foreigners  may  view  the  proceedings  of  my 
Government,  because  of  its  character  of  a  de  facto  government 
which  originated  in  a  Revolution. 


"The  Government 

"It  will  abolish  the  monopolies,  the  concessions,  leases  and  other 
illegal  contracts  relating  to  national  funds  and  properties  which  were 
created  during  the  administrations  of  Zelaya  and  of  Madriz. 

"In  order  to  give  a  full  guarantee  of  impartiality  to  foreigners  in 
these  actions,  the  Government  desires  to  place  itself  in  accord  with 
the  State  Department  with  reference  to  the  formation  of  a  tribunal, 
which  is  to  decide  the  claims  that  may  arise  from  such  actions.  I 
therefore  submit  for  the  approval  of  the  State  Department  the  sug- 
gestion that  a  Commission  be  appointed,  consisting  of  a  Nicaraguan 
citizen  and  an  American  citizen  recommended  by  the  Government 
of  the  United  States. 

"This  Commission  is  to  give  awards,  and  in  case  of  disagreement 
among  its  members,  is  to  submit  to  the  decision  of  an  umpire  to  be 
appointed  by  them  by  common  accord. 

"It  is  understood  that  this  tribunal  will  have  jurisdiction  only  over 
unliquidated  claims.  As  for  liquidated  claims,  my  Government  will 
respect  agreements  made  between  the  former  Governments  of  Nica- 
ragua and  those  of  other  nations,  paying  the  sums  which  this  Re- 
public may  owe  by  virtue  of  such  liquidations." 

The  creation  of  the  Mixed  Claims  Commission  was 
thus  provided  for  in  one  of  the  agreements  which  are 
commonly  known  as  the  "Dawson  Pacts."  It  was  later 
decided  that  the  Commission  be  composed  of  three  mem- 
bers and  that  its  jurisdiction  comprise  not  only  matters 
connected  with  concessions  and  contracts,  but  all  claims 
arising  from  any  cause  whatsoever  against  the  Govern- 
ment of  Nicaragua. 

The  objects  for  which  the  Commission  was  established 
are  concisely  stated  in  the  preamble  of  the  decree  of  the 
President  of  Nicaragua,  approved  by  the  National  As- 
sembly, May  17th,  1911,  as  amended  by  a  later  decree,  ap- 
proved October  14th,  1911.  The  said  preamble  reads: 

"The  President  of  the  Republic,  having  con- 
ferred with  the  Government  of  the  United  States 
as  to  the  best  mode  of  affording  a  just  and  equit-  * 


18 


able  solution  with  regard  to  the  validity  or 
validity  of  all  claims  pending  against  the  C 
ernment  of  Nicaragua,  including  those  which  i 
arise  out  of  the  cancellation  or  suspension  of  the 
monopolies,  leases,  concessions,  and  contracts 
entered  into  by  the  former  Governments  of  the 
Republic,  and  in  order  to  guarantee  to  citizens  and 
foreigners,  equally,  their  legitimate  rights,"  etc. 

For  the  payment  of  the  awards  of  the  Commission, 
it  was  agreed  in  the  conditional  loan  contract  of  Sep- 
tember 1st,  1911,  between  the  Republic  of  Nicaragua 
and  Brown  Bros.  &  Co.,  and  J.  &  W.  Seligman  &  Co.,  of 
New  York,  that  in  the  projected  loan  a  fund  which  might 
be  increased  to  five  million  dollars,  be  set  aside.  Later, 
in  the  supplementary  loan  contract,  between  the  same 
parties,  authorized  by  the  National  Assembly,  March 
20th,  1012,  it  was  expressly  provided  that,  while  the  debt 
created  by  the  said  contract  remained  unpaid,  the  Gov- 
ernment would  pay  no  pending  debt  except  current  ex- 
penses and  especially  no  war  debt,  but  that  all  such  claims 
should  be  submitted  to  the  Mixed  Claims  Commission. 
Unfortunately,  the  principal  loan  contract  of  September 
1st,  1911,  could  never  take  effect,  and  a  fund  of  C$158,- 
548.00  granted  at  the  end  of  the  year  of  1913,  has  been 
the  only  one  assigned  for  the  payment  of  awards  of  tf 
Commission. 

ill.  ORGANIZATION  OF  THE  COMMISSION. 

• 

As  appears  from  the  note  of  Minister  Martinez,  a 
quoted,  the  first  intention  was  to  appoint  a  Commission 
\vo  members,  with  a  third  person  acting  as  umpire 
in  case  of  their  disagreement.  Later  it  was  determined 
to  create  a  Commission  of  three  members,  who  were  all 
to  vole  on  each  question.  The  decree  approved  by  the 
National  Assembly  of  Nicaragua  on  May  17th,  It'll, 
provided  that  the  Mixed  Commission  be  composed  o 
three  members,  chosen  as  follows:  one  of  its  members 


19 

to  be  a  Nicaraguan  citizen  appointed  by  the  Government 
of  Nicaragua;  another  likewise  appointed  by  this  Gov- 
ernment, but  on  recommendation  of  the  Government  <>f 
the  United  States  of  America ;  and  an  umpire  to  be  <'< 
nated  by  the  Department  of  State  of  the  American  Gov- 
ernment. The  word  "umpire"  was  a  misnomer,  as  it  was 
further  provided  that  a  majority  vote  should  suffice  for 
a  final  decision  in  any  case,  ''the  three  members  being 
always  present  and  all  three  voting."  The  amendatory 
decree  approved  by  the  National  Assembly  on  October 
14th,  1911,  designated  the  Commissioner  appointed  by 
the  Department  of  State  as  the  President  of  the  Tribunal. 
The  Commission  thus  finally  came  to  be  composed  of  a 
President,  designated  by  the  State  Department  of  the 
United  States,  a  Nicaraguan  citizen,  appointed  by  the 
Nicaraguan  Government,  and  another  member  appointed 
by  the  Nicaraguan  Government  on  the  recommendation 
of  the  American  Government. 

The  Nicaraguan  Commissioner  appointed  by  the  Nic- 
araguan Government,  was  Dr.  Carlos  Cuadra  Pasos,  a 
member  of  the  Nicaraguan  bar.  On  the  recommendation 
of  the  American  Government,  the  Government  of  Nic- 
aragua further  appointed  as  Commissioner  Mr.  Thomas 
P.  Moffat  of  the  consular  service  of  the  United  States. 
As  President  of  the  Commission,  the  State  Department 
designated  Mr.  Otto  Schoenrich,  Judge  of  the  District 
Court  of  Mayaguez,  Porto  Rico. 

These  appointments  were  made  upon  the  publication 
of  the  first  legislative  provision  with  reference  to  the 
Commission  towards  the  end  of  March,  1911.  In  the 
beginning  of  May,  1911,  Mr.  Moffat  went  to  the  United 
States  because  of  his  health.  He  remained  away  for 
some  time  and  was  appointed  to  another  post  in  the  con- 
sular service  of  the  United  States.  On  November  6th, 
1911,  the  Government  of  Nicaragua  declared  his  post 
vacant.  In  December,  1911,  the  American  Government 
recommended  for  appointment  in  his  place,  Mr.  Arthur 
R.  Thompson,  of  the  bar  of  Washington,  D.  C.  Mr. 
Thompson's  departure  from  the  United  States  was  de- 


20 


layed,  and  he  arrived  in  Managua  on  March  5th,  1912. 
Since  then  the  membership  of  the  Commission  has  r< 
mained  unchanged. 

IV.  LAWS  AND  DECREES  RELATIVE  TO  THE  COMMISSIO] 

On  March  29th,  1911,  the  President  of  Nicaragua  i 
sued  a  decree  creating  the  Mixed  Claims  Commissio 
It  was  approved  with  several  additions  by  the  Nationa 
Assembly  of  Nicaragua,  but  doubts  having  arisen  as  to 
the  legality  of  its  passage,  the  National  Assembly  again 
adopted  it  on  May  17th,  1911.     An  amendatory  decree 
was  issued  by  the  President  of  Nicaragua  on  Octobe 
9th,  1911,  and  approved  by  the  National  Assembly 
October  14th,  1911. 

In  the  said  decrees  of  May  17th  and  October  14t 
1911,  it  was  recited  that  the  President  of  Nicaragu 
has  conferred  with  the  Government  of  the  United  States 
as  to  the  best  mode  of  affording  a  just  and  equitable  solu- 
tion with  regard  to  the  validity  or  invalidity  of  all  claims 
pending  against  the  Government  of  Nicaragua,  including 
those  which  may  arise  out  of  the  cancellation  or  su 
pension  of  monopolies,  leases,  concessions  and  contrac 
made  by  the  former  Governments  of  the  Republic  and 
that  the  Commission  is  created  with  the  said  object  and 
in  order  to  guarantee  to  citizens  and  foreigners  equally, 
their  legitimate  rights. 

The  said  laws  thereupon  proceeded  to  establish  a  tri 
Initial  or  Mixed  Commission  which  was  to  examine  an 
adjudge,  without  further  recourse,  all  unliquidated  claim 
ling  against  the  Government  of  Nicaragua,  includ- 
ing those  growing  out  of  the  cancellation  or  suspension 
of  concessions  <T  any  other  kind  of  contracts.  The  Com- 
ioQ  was  also  ^iven  jurisdiction  over  all  claims  which 
might  arise  or  might  have  arisen  against  the  Government 
of  Nicaragua,  from  the  beginning  of  the  administration 
of  President  Xelaya.  until  the  Commission  closes  its  work, 
.that  is  to  say,  the  Commission  was  given  jurisdiction  over 


r, 

i 


21 


claims  arising  since  July,  1893.  It  was  further  provided 
that  the  Commission  have  jurisdiction  over  claims  which 
the  Government  of  Nicaragua  might  wish  to  bring  against 
owners  of  monopolies,  concessions,  leases  or  other  classes 
of  contracts,  made  by  former  Governments  of  the  Re- 
public or  because  of  violations  committed  by  the  holders 
of  contracts  of  concessions. 

The  seat  of  the  Commission  was  to  be  in  Managua, 
but  it  was  empowered  to  meet  at  its  discretion  in  other 
places  to  facilitate  the  better  examination  of  claims.  The 
Commission  was  directed  in  the  examination  of  cases  to 
give  precedence  to  claims  arising  out  of  military  loans, 
requisitions  or  exactions  by  either  faction  during  the 
civil  war  of  1909-1910. 

It  was  provided  that  the  Mixed  Claims  Commission  be 
composed  of  three  persons :  one  a  Nicaraguan  citizen, 
appointed  by  the  Nicaraguan  Government;  another  ap- 
pointed by  the  Nicaraguan  Government  on  the  recom- 
mendation of  the  American  Government ;  and  the  Presi- 
dent designated  by  the  American  State  Department.  No 
meeting  was  to  be  held  without  the  presence  of  the  Presi- 
dent of  the  Commission,  nor  any  rule  or  regulation  to  be 
put  into  effect  until  the  President  of  the  Commission  had 
recorded  his  opinion  thereon.  In  giving  judgment  the 
three  members  were  always  to  be  present  and  all  three 
were  to  vote,  a  majority  vote  prevailing. 

In  case  any  Commissioner  was  persistently  absent  with- 
out just  cause,  or  was  for  any  reason  incapacitated  for 
the  performance  of  his  duties,  the  attending  members 
were  to  notify  the  Government  of  Nicaragua,  which  Gov- 
ernment would  thereupon  declare  a  vacancy  to  exist  as 
to  such  member.  The  vacancy  was  to  be  filled  within 
thirty  days  in  the  same  manner  in  which  the  original 
appointment  was  made. 

The  President  of  the  Commission  was  to  receive  an 
annual  salary  of  $10,000.00  gold,  and  each  of  the  other 
two  members  one  of  $8,000.00  gold,  each  of  the  three 
members  also  being  allowed  $2,000.00  gold  annually  for 
expenses.  The  Commission  was  empowered  to  employ, 


22 


a  clerical  force  necessary  for  the  conduct  of  its  work. 
The  Commissioners  and  clerical  force  were  to  be  com- 
pensated by  the  Nicaraguan  Government. 

By  the  said  laws,  the  President  of  Nicaragua  was  di- 
rected, within  a  period  that  was  afterwards  extended  to 
December  31st,  1913,  to  cancel  by  special  decrees  all  con- 
tracts or  concessions  which  might  be  illegal  or  uncon- 
stitutional. Express  notice  of  the  cancellation  was  to  be 
given  to  the  parties  concerned,  who  had  six  months  to  file 
their  claim.  If  the  parties  failed  to  appear  before  the 
Commission  within  said  term  of  six  months,  and  pre- 
sented no  valid  excuse  for  not  appearing,  the  Commis- 
sion was,  on  motion  of  the  Government  to  declare  the 
concession  lapsed  and  the  right  of  indemnity  forfeited. 
No  decree  of  cancellation  was  to  take  effect  until  affirmed 
by  the  Commission  after  an  opportunity  for  a  full  hear- 
ing had  been  granted  to  the  parties  concerned,  and  until 
such  damages,  if  any,  as  might  be  awarded  by  the  Com- 
mission, had  been  paid. 

All  other  claims  were  to  be  filed  within  six  months 
after  the  date  on  which  the  Commission  formally  began 
its  regular  sessions,  the  claimants  losing  their  rights  in 
case  they  failed  to  appear  within  the  specified  term.  Ow- 
ing to  the  absence  of  one  of  the  Commissioners,  the  Com- 
mission was  unable  to  open  its  regular  session  until  March 
2Gth,  1912,  and  the  term  for  filing  claims  should  thus  have 
expired  on  September  26th,  1912,  but  it  was  later,  by  leg- 
islative decree,  extended  to  July  8th,  1913. 

The  law  of  October  14th,  1911,  also  provided  that  the 
Government  of  Nicaragua  would  accept  the  decisions  of 
the  Commission  as  final  and  binding  adjudications,  and 
undertake  at  once  to  pay  all  awards  made  against  the  Gov- 
ernment by  said  tribunal.  This  provision  was  due  to  the 
opinion  then  prevailing  that  a  loan  would  soon  be  made 
and  money  be  available  for  such  payments.  As  the  loan 
has  not  been  made  and  the  Government  of  Nicaragua 
has  been  unable  to  emerge  from  its  financial  difficulties, 
the  latter  part  of  this  section  of  the  law  has  become  a  dead 
letter. 


23 


Inasmuch  as  the  two  decrees  above  cited  provided  for 
a  special  court,  with  judges  not  citizens  of  Nicaragua, 
they  conflicted  with  several  general  sections  of  the  new 
constitution  drafted  in  1911  for  Nicaragua.  Special  pro- 
vision was  therefore  made  for  the  Mixed  Commission  in 
the  Constitution.  In  the  transitory  provisions,  Article  171 
was  inserted,  which  expressly  confirmed  the  laws  of  May 
17th,  and  October  14th,  1911.  The  Constitution  was 
promulgated  in  January,  1912. 

After  the  war  of  1912,  the  President  of  Nicaragua,  on 
November  8th,  1912,  issued  a  decree  relative  to  the  man- 
ner of  presenting  evidence  to  the  Commission,  with  ref- 
erence to  damages  caused  by  the  Government  forces  dur- 
ing said  war. 

The  war  of  1912  interrupted  the  term  within  which 
claims  might  be  filed  before  the  Commission.  On  Feb- 
ruary 21st,  1913,  the  National  Assembly  granted  a  new 
term  until  July  8th,  1913,  for  the  filing  of  claims  and  ex- 
tended until  December  31st,  1913,  the  time  within  which 
the  Executive  was  to  cancel  illegal  concessions. 

V.  RUIZES  OF  PROCEDURE  OF  THE  COMMISSION. 

The  law  of  May  17,  1911,  provided  that  the  Mixed 
Commission  issue  its  interior  regulations  and  its  rules  of 
procedure  in  conformity  with  which  each  party  was  to 
be  given  due  hearing  and  sufficient  time  for  the  presenta- 
tion of  proofs.  The  Commission  adopted  regula- 
tions and  rules  of  procedure  almost  identical  with  those 
observed  by  other  mixed  commissions. 

The  rules  of  procedure  were  drafted  in  May,  1911,  im- 
mediately after  the  arrival  in  Nicaragua  of  the  Commis- 
sioner designated  by  the  State  Department,  and  on  May 
30th,  1911,  they  were  published  in  pamphlet  form.  When 
the  Commission  formally  opened  its  regular  sessions  on 
March  26th,  1912,  the  said  rules  of  procedure  were  rati- 
fied with  a  few  small  additions,  and  were  published  in 
the  newspapers  and  by  means  of  new  pamphlets. 


24 

The  rules  of  procedure  clearly  explained  what  the 
memorial  presented  to  the  Commission  should  contain. 
They  provided  that  the  proofs  in  support  of  claims  were 
to  be  filed  at  the  time  of  filing  the  memorial  or  within  one 
month  thereafter.  All  testimony  of  witnesses  was  to 
be  taken  before  a  competent  functionary  and  according 
to  the  laws  of  Nicaragua  or  the  place  where  rendered. 
The  form  of  the  depositions  and  the  manner  of  verifying 
documents  presented  as  proof  were  explained. 

The  rules  provided  that  when  a  claimant  should  have 
filed  h^  proof  or  the  time  for  filing  the  same  should  have 
expired,  the  Government  of  Nicaragua  was  within  the 
term  of  two  months  to  file  its  answer  or  counter-claim, 
together  with  its  evidence. 

It  was  also  provided  that  if  the  claimants  so  requested 
they  would  be  allowed  a  period  of  one  month  for  the  pre- 
sentation of  testimony  in  rebuttal,  in  which  case  the  Gov- 
ernment would  be  entitled  to  a  similar  period  for  filing 
testimony  in  surrebuttal.  Ten  days  after  the  presentation 
of  all  proofs,  the  claimant  might  file  a  brief,  and  five  days 
thereafter  the  Government's  brief  must  be  filed.  At  the 
hearing  to  be  set  by  the  Commission,  counsel  on  both 
sides  might  argue  the  case.  The  Commission  reserved 
to  itself  the  right,  in  its  discretion,  to  extend  the  time  for 
presenting  evidence,  answers  or  briefs  in  particular  cases. 
It  also  reserved  the  right  to  order,  at  any  time,  the  pro- 
duction of  additional  evidence  or  the  appearance  of  any 
claimant  or  witness. 

It  was  provided  that  the  language  of  the  Commission 
be  Spanish,  but  that  pleadings,  evidence  and  briefs  might 
also  be  filed  in  English,  German,  French  or  Italian,  but 
accompanied  with  a  Spanish  translation.  With  the  ex- 
ception of  a  few  documents  in  English,  all  papers  filed 
with  the  Commission  were  in  the  Spanish  language.  All 
motions  or  petitions  addressed  to  the  Commission  were  to 
be  made  in  writing.  With  each  memorial,  answer,  writ- 
ing, proof  and  brief,  a  signed  copy  thereof  was  to  be  filed 
with  the  secretary  for  the  use  of  the  opposite  party. 
%\Vhenever  the  amount  of  any  claim  exceeded  $75,000.00 


25 


gold,  twenty  printed  copies  of  the  memorial,  evidence,  an- 
swer and  briefs  were  to  be  filed  with  the  secretary  at  the 
time  of  filing  the  respective  original  documents.  This 
paragraph  was  not  made  applicable  to  the  Government  of 
Nicaragua,  but  the  Commission  stated  that  it  would  have 
copies  printed  of  such  documents  filed  by  the  Government 
as  it  might  deem  advisable.  Nevertheless,  in  view  of  the 
poverty  of  the  Government,  the  Commission  never  had 
any  pleading  of  the  Government  printed. 

The  rules  prescribed  the  duties  of  the  secretary  and  an- 
nounced that  the  entries  in  the  docket,  minute  book  and 
book  of  awards  were  to  be  deemed  notice  to  the  oppos- 
ing party  and  to  all  concerned,  but  the  Commission  might 
also  order  express  notice  to  be  given.  The  parties  in  in- 
terest received  express  notification  of  all  orders  relating 
to  evidence  and  hearings. 

In  cases  instituted  by  the  Government  of  Nicaragua, 
it  was  ordered  that  the  same  procedure  be  followed  as  in 
claims  against  the  Government,  as  far  as  practicable,  the 
Commission  acquiring  jurisdiction  over  the  defendant 
in  accordance  with  the  laws  of  Nicaragua. 

Long  before  the  rules  were  drafted  many  persons  who 
had  suffered  loss  during  the  Revolution  of  1909  to  1910 
had  filed  their  claims  with  local  Boards  of  Exactions, 
whose  decisions  were  to  be  reviewed  by  the  Mixed  Com- 
mission. Because  of  the  number  of  these  claims,  which 
amounted  to  several  thousand,  and  because  of  their  small 
amount,  it  was  not  advisable  to  oblige  the  claimants  to 
file  a  memorial  in  regular  form,  and  they  were  there- 
fore excepted  from  the  procedure  provided  in  the  rules 
of  the  Commission,  unless  expressly  ordered  otherwise, 
and  it  was  provided  that  upon  an  examination  of  such 
claims  and  their  proofs,  the  Commission  would  give  judg- 
ment for  such  amount  as  might  appear  proper. 

In  cases  in  which  the  Government  of  Nicaragua  rec- 
ognized the  validity  of  the  claim  or  desired  to  facilitate 
its  payment,  the  Government  was  permitted  to  appear  be- 
fore the  Commission  on  behalf  of  the  respective  claim- 
ant. In  such  cases  the  procedure  provided  by  the  rules* 


26 

would  also  be  dispensed  with,  unless  expressly  ordered 
otherwise,  and  the  Commission,  after  examining  the 
claim  and  the  evidence,  would  give  judgment  for  such 
amount  as  it  deemed  proper.  This  rule  was  adopted  to 
facilitate  certain  amicable  settlements  which  the  Gov- 
ernment desired  to  make  in  various  diplomatic  claims, 
but  the  Government  took  advantage  of  it  only  in  three 
cases. 

When  the  first  rules  were  adopted,  the  idea  was  that 
the  Government  was  to  file  an  answer  in  every  case  ex- 
cept in  the  small  war  claims  of  1909  to  1910,  which  had 
already  been  passed  on  by  the  Boards  of  Exactions. 
After  the  war  of  1912,  so  many  hundreds  of  cases  were 
filed,  and  the  answers  of  the  Government  came  in  so 
slowly,  that  a  different  procedure  became  necessary.  It 
was  also  observed  that  in  all  cases  the  answer  of  the 
Government  merely  pointed  out  defects  in  the  claim  and 
never  furnished  new  proofs.  The  Commission,  therefore, 
on  April  16th,  1913,  adopted  its  rule  No.  18,  under  which 
claims  arising  in  the  war  of  1912,  and  not  amounting  to 
four  thousand  cordobas,  were  to  be  decided  without  neces- 
sity of  hearing  the  representative  of  the  Government,  un- 
less the  Commission  expressly  ordered  otherwise. 

Rule  No.  18  relieved  the  Government  from  the  neces- 
sity of  answering  any  case  except  the  most  important 
i  >nes,  but  even  so  the  answers  were  filed  very  tardily  and 
it  was  evident  that  the  work  of  the  Commission  would 
bi-  indefinitely  prolonged  if  it  were  necessary  to  wait  for 
the  answers.  The  Commission  might  have  declared  the 
Government  in  default,  but  disliked  to  do  so  because  of 
•ant  desire  to  give  both  parties  every  possible  op- 
portunity to  set  forth  and  defend  their  rights.  In  view 
of  the  difficulty  Rule  No.  19  was  adopted  on  February 
l!Hh.  11)14,  providing  that  in  claims  in  which  the  Gov- 
ernment tiled  no  answer,  it  was  to  be  understood  as  ob- 
jecting to  the  claim  in  general  terms  and  requiring  the 
claimant  to  prove  his  ease. 

Notwithstanding  Rule  l(->,  the  Commission  insisted 
;hat  the  Government  file  some  answer  in  cases  for  can- 


27 

cellation  of  concessions  in  which  the  amount  claimed  ex- 
ceeded $500,000.00.  The  tardiness  of  the  Government 
in  answering  some  of  these  claims  is  one  of  the  rea 
why  the  Commission  has  not  been  able  to  terminate  its 
work  before  this  date.  The  answer  of  the  Govmiim-m 
in  the  case  of  the  Corinto  Wharf  was  not  filed  until  Oc- 
tober 1st,  1914,  a  year  and  five  months  after  the  expira- 
tion of  the  period  designated  in  the  rules  of  the  Com- 
mission. In  justice  to  the  attorney  for  the  Government, 
it  should  be  stated,  however,  that  some  of  these  delays 
were  due  to  the  poverty  of  the  Government  of  Nicaragua, 
which  did  not  even  permit  the  employment  of  a  clerk 
to  the  attorney,  and  also  in  part  to  the  fact  that  for  a 
long  time  negotiations  were  on  foot  with  a  view  to  com- 
promising the  most  important  cases. 

It  was  also  the  original  idea  to  hold  hearings  in  all 
cases  except  small  war  claims.  Many  claims  were  set 
for  hearing,  but  in  only  a  few  cases  did  the  claimants  ap- 
pear, and  even  then  they  generally  contented  themselves 
with  ratifying  what  they  had  already  stated  in  their  plead- 
ings. With  the  object  of  gaining  time,  the  Commission 
therefore,  on  February  19th,  1914,  adopted  its  rule  No. 
20,  in  which  it  was  provided  that  the  Commission  would 
give  judgment  without  a  public  hearing  in  cases  in  which 
the  sum  claimed  did  not  amount  to  forty  thousand  cor- 
dobas,  unless  the  claimant  or  the  Government  requested 
that  a  date  be  set  for  hearing,  or  the  Commission  ex- 
pressly ordered  otherwise. 

The  primary  objects  of  these  rules  of  procedure  were 
to  protect  the  rights  of  both  parties,  to  give  each  the  op- 
portunity of  duly  presenting  his  case,  and  to  obtain  a 
prompt  decision.  Notwithstanding  the  broadness  of  the 
rules,  the  majority  of  claimants  violated  them  in  one  way 
or  another,  either  through  ignorance,  carelessness  or  in- 
difference. Nevertheless  the  Commission  has  in  all  cases 
endeavored  to  give  judgment  according  to  the  evidence 
presented,  overlooking  violations  of  the  rules,  unless  such 
violations  were  so  .serious  as  to  render  the  evidence  value- 
less or  injure  the  rights  of  the  other  party.  . 


28 

VI.  STATUS  OF  THE  COMMISSION. 

From  the  above,  it  will  be  evident  that  the  Commission 
technically  is  a  Nicaraguan  court,  but  at  the  same  time, 
a  quasi-international  tribunal.  In  rendering  decisions,  the 
Commission  has  constantly  applied  international  law,  and 
its  rules  of  procedure  were  similar  to  those  adopted  by 
other  international  mixed  commissions. 

We  have  been  informed  that  various  foreign  govern- 
ments were  dissatisfied  because  they  were  not  represented 
on  the  Commission,  and  that  one  government  went  so  far 
as  to  protest,  but  was  answered  that  the  court  was  purely 
a  Nicaraguan  tribunal  and  that  foreigners  should  not  ex- 
pect less  justice  from  the  court  because  of  the  fact  that 
two  of  its  members  were  American  citizens.  On  Decem- 
ber 9th,  1911,  the  Minister  of  Foreign  Affairs  of  Nic- 
aragua, sent  to  the  foreign  diplomatic  representatives 
accredited  to  Nicaragua,  a  circular  in  which  he  explained 
the  nature  and  jurisdiction  of  the  Mixed  Commission  as 
a  special  Nicaraguan  court  of  claims,  called  attention  to 
the  rule  of  international  law  that  local  legal  remedies 
must  be  exhausted  before  recourse  can  be  had  to  diplo- 
matic channels,  and  gave  notice  that  all  claims  against 
Nicaragua  must  be  presented  to  the  Mixed  Commission. 
He  insinuated  that  only  in  the  remote  case  of  denial 
of  justice  by  the  Commission  could  a  claim  be  taken  up 
through  diplomatic  channels. 

The  Government  of  the  United  States  constantly  and 
loyally  directed  its  citizens  to  file  their  claims  before  the 
Mixed  Commission,  where  judgment  would  be  rendered 
in  accordance  with  the  law  and  the  evidence.  The  same 
cannot  be  said  with  reference  to  all  other  foreign  govern- 
ments. According  to  information  we  have  received,  the 
representative  of  one  of  these  governments  even  pro- 
hibited the  subjects  of  his  country  from  presenting  any 
claim  before  this  Commission.  A  number  of  foreign 
claims  were  presented  directly  to  the  Government  of 
Nicaragua,  and  the  Government,  as  we  understand,  in 
of  the  circumstances,  felt  itself  obliged  to  yield  to 


29 


the  pressure  exerted  upon  it  and  settle  claims  without  sub- 
mitting them  to  the  Commission.  Such  direct  settle- 
ments had  the  natural  effect  of  diminishing  the  prestige  of 
the  Commission.  They  further  placed  other  foreigners 
in  a  position  of  preference  over  American  citizens,  as 
well  as  over  Nicaraguan  citizens.  In  some  of  the  diplo- 
matic settlements,  which  we  have  seen  published  in  the 
Official  Gazette  and  other  official  publications,  the  com- 
promise appears  just  and  equitable,  but  in  several  other 
cases  we  are  convinced  that  the  judgments  would  have 
been  more  in  accord  with  law  and  equity  if  they  had  been 
rendered  by  the  Mixed  Commission. 

Although  many  foreign  countries  were  not  enthusiastic 
about  the  Commission,  the  number  of  foreign  claims, 
as  indicated  in  the  statistical  tables,  amounted  to  417, 
twenty-four  countries  being  represented.  It  should  be 
observed,  nevertheless,  that  many  of  these  were  not  filed 
directly  with  the  Commission,  but  with  local  Boards  of 
Exactions,  without  knowledge  that  the  Commission  would 
render  final  judgment  in  the  case. 

Though  the  number  of  foreign  claims  constitutes  only 
5  per  cent,  of  the  claims  filed  with  the  Commission,  the 
amount  claimed  therein  was  60  per  cent,  of  the  total 
amount  claimed.  The  number  of  American  claims  was 
only  66,  or  less  than  1  per  cent.,  but  the  amount  claimed 
was  C$7,576,564.13,  or  55  per  cent  of  the  total  amount 
claimed. 

It  is  quite  possible  that  in  reality  the  number  of  for- 
eign claims  is  somewhat  larger  than  here  stated,  because 
the  only  claims  counted  were  those  of  persons  who  stated 
that  they  were  foreigners,  or  whose  nationality  was 
known  to  the  Commission,  and  all  others  were  classified 
as  Nicaraguan  claims.  It  is  not  probable,  however,  that 
the  difference  is  very  large. 

The  great  majority  of  claims,  95  per  cent,  of  the  whole 
number,  were  Nicaraguan  claims.  They  were  7,491  in 
number  and  the  amount  claimed  was  C$6,491,533.13  or 
4-0  per  cent,  of  the  total  amount  claimed.  It  should  be 
remembered,  nevertheless,  that  this  sum  comprises  the. 


30 

claim  of  the  Compafiia  de  Aguardiente  Limitada,  and 
that,  although  this  company  was  a  Nicaraguan  corpora- 
tion, its  stock  belonged  almost  entirely  to  foreigners.  If 
the  amount  of  this  claim,  which  was  C$1,235,390.24,  is 
taken  off,  7,490  Nicaraguan  claims  remain,  with  an 
amount  claimed  of  C$4,256,142.89. 

As  in  the  case  of  the  foreign  claims,  so  also  in  that  of 
Nicaraguan  claims,  not  all  were  decided  by  the  Commis- 
sion. During  the  year  1911,  the  Government  of  Nic- 
aragua settled  directly  and  paid  a  number  of  war  claims 
belonging  to  Nicaraguans,  without  reference  to  the  Com- 
mission. At  that  time  the  Nicaraguan  Government  be- 
lieved itself  empowered  to  make  direct  settlement  wher- 
ever it  thought  advisable.  The  specific  pledge  to  send 
all  war  claims  to  the  Commission,  was  contained  in  the 
supplementary  loan  law,  of  March  20th,  1912. 

Of  the  claims  arising  during  the  war  of  1912,  many 
have  also  been  decided  by  the  Government,  without  ex- 
amination by  the  Commission.  By  the  law  of  January 
10th,  1913,  the  National  Assembly  directed  that  damages 
caused  by  insurgents  during  the  war  of  1912,  to  persons 
who  remained  loyal  to  the  Government,  should  be  con- 
sidered as  part  of  the  national  debt,  and  authorized  the 
Executive  to  decree  the  form  in  which  the  recognition  of 
such  exactions  should  be  made.  As  the  law  creating  the 
Mixed  Commission,  which  was  part  of  the  Constitution 
of  Nicaragua,  had  conferred  upon  the  Commission  jur- 
isdiction over  all  claims,  which  from  any  cause  whatso- 
ever might  arise  against  the  Government  before  the  con- 
clusion of  the  Commission,  we  rendered  many  decisions 
in  cases  comprised  in  the  provisions  of  the  said  law  of 
January  10th,  1913.  At  the  same  time,  in  Government 
circles,  the  law  was  interpreted  in  the  sense  of  authoriz- 
ing the  Executive  to  recognize  the  respective  claims,  and 
the  Kxecutive,  by  means  of  decrees,  rendered  decisions  in 
many  cases.  It  is  probable  that  it  would  have  been  pre- 
ferable if  all  these  cases  had  been  sent  to  the  Commission. 
In  the  decrees  published  in  the  Official  Gazette,  it  is  to 
be  observed  that  these  claimants  were  conceded  larger 


31 


sums  for  their  horses  and  cattle  than  those  awarded  by 
the  Commission,  and  that  a  preference  was  thu>  estab- 
lished. 

The  greatest  obstacle  to  a  frank  and  general  accept- 
ance of  the  Commission  by  natives  ,and  foreigners,  has 
always  been  the  lack  of  funds  to  pay  the  Commission's 
awards.  At  the  time  the  Commission  was  created,  it 
wras  supposed  that  within  a  few  months  a  loan  would  pro- 
vide the  necessary  money.  Over  two  and  one-half  years 
passed  before  a  penny  became  available,  and  the  sum 
which  was  then  assigned  to  the  Commission  was  insuffi- 
cient even  for  the  payment  of  the  small  awards.  Had 
the  awards  been  promptly  paid,  as  rendered,  the  argument 
would  have  been  strong  enough  to  induce  foreigners  and 
natives  to  resort  to  the  Commission  in  the  first  place,  in- 
stead of  bothering  the  Government  authorities.  Under 
the  conditions  which  prevailed,  all  the  arguments  were 
the  other  way.  The  filing  of  a  claim  with  the  Commis- 
sion seemed  to  condemn  the  claimant  to  wait  for  an  in- 
definite time  for  the  payment  of  his  credit,  while,  by 
presenting  their  claims  to  the  Government,  many  persons 
believed  that  there  would  be  no  such  careful  examination 
of  the  evidence  and  that  it  might  be  possible  to  obtain, 
by  entreaties  or  importunities,  the  payment  of  the  whole 
or  part  of  a  claim.  This  state  of  affairs  became  embar- 
rassing in  the  highest  degree  to  the  members  of  the  Com- 
mission. 

VII.  PROCEEDINGS  OF  THE  COMMISSION. 

The  presidential  decree  of  March  29th,  1911,  ap- 
pointed as  members  of  the  Commissions,  Dr.  Carlos 
Cuadra  Pasos  and  Mr.  Thomas  P.  Moffat,  who  at  that 
time  were  already  in  Managua.  At  the  same  time,  Mr. 
Otto  Schoenrich,  designated  as  member  of  the  Commis- 
sion by  the  State  Department,  was  called  from  Port-. 
Rico  to  Washington,  from  where  he  continued  to  Nic- 
aragua, arriving  in  Managua  on  May  5th,  1911. 

On  account  of  ill  health,  Mr.  Moffat  was  only  awaiting , 


32 

the  arrival  of  Judge  Schoenrich  to  leave  the  country.  The 
members  of  the  Commission  held  an  informal  meeting 
on  May  6th,  1911.  It  was  decided  that  during  the  ab- 
sence of  Mr.  M  off  at  Messrs.  Schoenrich  and  Cuadra 
Pasos  were  to  select  and  furnish  quarters  for  the  Com- 
mission, adopt  and  publish  rules  of  procedure,  and  re- 
ceive and  study  claims.  Mr.  Moffat  left  Managua  for 
the  United  States  in  the  evening  of  May  6th. 

The  occurrences  which  accompanied  the  resignation  of 
President  Estrada,  on  May  8th,  1911,  constituted  the 
first  delay  for  the  members  of  the  Commission,  but  in  the 
same  month,  Messrs.  Schoenrich  and  Cuadra  Pasos  in- 
stalled the  Commission  and  formulated  and  published 
rules  of  procedure.  As  already  explained,  those  rules 
were  very  similar  to  those  adopted  by  various  interna- 
tional commissions  on  which  the  American  Government 
has  been  represented,  and  at  the  first  formal  session  of 
the  Commission  in  March,  1912,  they  were  ratified,  sev- 
eral modifications  and  additions  suggested  by  experience 
being  made  at  that  time  and  subsequently. 

For  about  a  year,  the  members  of  the  Commission  prej 
ent  in  Managua,  were  frequently  called  on  by  the 
ernment  of  Nicaragua  for  advice  and  assistance  in  coi 
nection  with  various  laws  under  consideration,  such 
the  laws  relating  to  the  loan  contracts  and  the  currenc 
law.    While  such  work  had  no  direct  relation  with  theii 
duties,  the  Commissioners  were  glad  to  give  the  Gove] 
ment  what  help  they  could,  in  the  development  of  il 
program  of  rehabilitating  the  country. 

In  June,  1911,  the  first  claim  was  filed  and  in  Auj 
the  Minister  of  War  began  to  forward  thousands  oi 
claims  presented  to  the  local  Boards  of  Exactions.  Tl 
members  of  the  Commission  were  soon  busily  engaged  ii 
studying  these  claims  and  in  drafting  decisions. 

In  November  and  December,   1911,  Messrs.   Schoen- 
rich and  Cuadra  Pasos  acted  as  mediators  between  the 
Government  and  representatives  of  a  group  of  conces- 
sions, known  as  the  Deitrich  concessions.     The  compn 
uinise  which  was  effected  after  long  and  wearisome  negc 


33 

tiations,  and  which  will  be  further  referred  to  hereinafter, 
is  one  of  the  most  important  achievements  t<>  tin-  credit 
of  the  Commission.  This  one  service  is  more  than  suf- 
ficient to  justify  the  entire  cost  of  the  Commission  fn.in 
its  incipiency  to  its  termination. 

Mr.  Moffat  not  having  returned  to  Nicaragua,  Mr. 
Arthur  R.  Thompson  was  appointed  in  his  place  in  De- 
cember, 1911.  Mr.  Thompson  arrived  in  Managua  on 
March  5th,  1912.  The  notice  to  claimants  required  by 
the  law  creating  the  Mixed  Claims  Commission,  was  im- 
mediately published  in  the  Official  Gazette  and  on  March 
26th,  1912,  the  Commission  formally  opened  its  sessions. 
It  will  thus  be  seen  that  almost  a  year  elapsed  between 
the  creation  of  the  Commission  and  the  beginning  of  its 
sessions,  but  that  this  time  was  not  lost. 

There  were  two  circumstances  which  seriously  hamp- 
ered the  Commissioners  in  the  performance  of  their 
duties.  One  of  these  was  the  difficulty  of  obtaining  a 
competent  clerical  force.  Stenography  is  practically  un- 
known in  Managua  and  it  was  impossible  to  secure  a 
single  shorthand  writer.  There  are  also  few  expert  type- 
writers, and  these  were  employed  in  good  positions,  which 
they  were  not  desirous  of  leaving.  With  great  difficulty, 
and  after  numerous  trials,  each  member  of  the  Commis- 
sion finally  secured  a  typewriter.  It  has  been  necessary 
to  dictate  all  decisions  to  the  machine  or  to  draft  judg- 
ments in  longhand  for  the  typewriters  to  copy. 

Another  difficulty  was  the  poverty  of  the  Government 
of  Nicaragua.  On  this  account,  it  was  necessary  to  limit 
the  office  force  to  the  smallest  possible  number;  it  was 
impossible  to  appoint  attorneys,  agents  or  investigators 
in  other  places  as  a  thorough  compliance  with  the  Com- 
mission's duties  would  have  required ;  and  journeys  of 
investigation  or  inspection  were  not  to  be  thought  of. 
For  many  months  the  salaries  of  the  Commissioners  and 
clerical  force  were  far  in  arrears.  It  became  difficult  to 
obtain  the  most  essential  office  supplies,  and  the  members 
of  the  Commission  were  obliged  to  pay  the  rental  of  the 
Commission's  quarters  out  of  their  own  pockets,  and  to. 


n  re- 
four 


advance  money  to  their  employees  to  keep  them  from 
signing.  In  May,  1912,  the  salaries  were  about 
months  in  arrears  and  the  Commissioners  were  consider- 
ing presenting  their  resignation,  but  at  this  time  an  ar- 
rangement was  made  between  the  Government  and  the 
bankers  who  collected  the  customs  revenues  of  Nicaragua, 
by  which  a  small  sum  was  assigned  in  each  month  for 
the  maintenance  of  the  Commission.  The  law  of  October 
14th,  1911,  empowered  the  Commission  to  employ  a  cleri- 
cal force  necessary  for  the  conduct  of  its  work,  which  was 
to  be  compensated  by  the  Nicaraguan  Government  in 
the  same  manner  as  the  Commissioners,  but  in  view  of 
the  lack  of  funds,  the  Commission  has  not  been  able  to 
employ  the  whole  force  which  was  necessary,  but  only 
the  most  indispensable  clerks. 

The  Commission  had  entered  upon  a  regular  routine 
and  was  handing  down  decisions  daily,  when  its  labors 
were  suddenly  interrupted  by  the  insurrection  of  1912. 
On  July  29th,  1912,  the 'Minister  of  War  rose  against 
the  Government  and  the  disturbances  which  followed 
caused  a  suspension  of  all  work.  Several  employees  of 
the  Commission  were  drafted  into  the  army  and  another 
was  imprisoned  by  the  insurgents.  When  the  revolu- 
tionists approached  Managua  a  part  of  the  archives  wen 
sent  to  the  American  Legation  for  safe-keeping.  Dur- 
ing the  bombardment  of  Managua,  August  11-14,  1912, 
the  members  of  the  Commission  shared  the  dangers  of 
the  other  inhabitants  of  the  city.  Shells  fell  around  the 
offices  of  the  Commission  which  were  then  situated  in 
a  building  opposite  the  Presidential  Mansion.  On  Aug- 
ust 12th,  during  the  heighth  of  the  bombardment,  the 
Commissioners  held  a  meeting  and  resolved  that  inas- 
much as  the  country  was  in  a  state  of  war,  and  the  city 
besieged  and  bombarded,  the  public  sessions  of  the  Com- 
mission be  suspended  until  the  war  ended  and  the  country 
returned  to  normal  conditions. 

Upon  the  termination  of  the  bombardment  on  August 

1-lth.  the  two  American  members  proceeded  to  the  port 

oiinto  with  the  intention  of  looking  after  certain 


35 

Red  Cross  supplies  and  returning  within  a  few  days. 
Their  return  was  prevented  when  the  City  of  Leon 
against  the  Government  and  the  insurgents  stopped  rail- 
road communications.  They  were  obliged  to  remain  in 
Corinto  while  that  port  was  besieged  by  the  revolution- 
ists. After  marines  had  been  disembarked  and  had  taken 
possession  of  the  railroads,  Judge  Schoenrich  returned 
to  Managua  on  September  16th,  on  the  first  train  carry- 
ing civilian  passengers. 

The  war  had  paralyzed  the  activities  of  the  Commission 
completely,  and  it  was  evident  that  until  peace  was  re- 
stored, the  work  could  not  be  resumed.  With  the  ap- 
proval of  the  President  of  Nicaragua,  it  was  determined 
that  the  Commission  take  a  recess  until  the  end  of  Janu- 
ary, 1913,  and  that  the  two  American  Commissioners  pro- 
ceed to  the  United  States.  Judge  Thompson  left  Corinto 
on  September  17th,  and  Judge  Schoenrich  on  September 
24th,  after  having  put  the  archives  of  the  Commission  in 
order.  Both  Commissioners  took  with  them  a  large  num- 
ber of  claims  and  continued  their  examination  of  these 
in  the  United  States. 

Peace  having  been  restored  in  Nicaragua,  Judges 
Schoenrich  and  Thompson  returned  in  January,  IDI'J. 
Upon  their  arrival,  it  was  found  necessary  to  transfer 
the  Commission's  headquarters  to  another  building  as 
our  lease  had  expired  and  this  caused  some  delay  in  the 
work;  but  arrangements  were  soon  completed  and  the 
Commission  began  handing  down  decisions  in  a  large 
number  of  claims.  Other  difficulties  arose,  however, 
to  hamper  the  work.  Almost  two  years  of  continuous 
economic  difficulties  had  passed  over  the  country.  The 
loan  which  the  Government  had  expected  to  make  had 
not  materialized,  the  financial  situation  of  the  Govern- 
ment had  become  acute,  and  the  position  of  the  Commis- 
sion and  of  its  members  was  most  embarrassing.  The 
Government  decided  to  send  to  the  United  States  the 
Minister  of  Finance  of  Nicaragua,  who  was  to  endeavor 
to  find  means  in  banking  circles  to  alleviate  the  economic 
difficulties.  With  the  approval  and  consent  of  the  Gov-« 


36 

eminent  of  Nicaragua,  it  was  also  determined  that  the 
t\vo  American  Commissioners  return  to  the  United  States 
to  give  advice  and  assistance  to  the  Minister  of  Finance 
and  in  order  to  be  in  the  United  States  upon  the  expira- 
tion of  the  arrangement  for  defraying  the  expense  of  the 
Commission  out  of  the  customs  receipts.  The  work  of 
the  Commission,  in  the  meantime,  was  to  go  forward, 
the  two  American  Commissioners  taking  with  them  1,500 
claims  for  study  and  for  the  drafting  of  decisions. 

The  said  Commissioners  left  Corinto  on  May  1st,  1913, 
and  proceeded  to  Washington.  After  a  conference  with 
the  Secretary  of  State,  they  presented  a  memorandum 
dated  June  2d,  1913,  containing  a  resume  of  the  labors 
of  the  Mixed  Claims  Commission.  They  participated 
in  the  negotiations  between  the  Nicaraguan  representa- 
tives and  the  State  Department  in  Washington,  and  the 
bankers  in  New  York.  At  the  same  time,  they  continued 
the  study  of  the  documents  they  took  with  them  and 
drafted  many  judgments.  Upon  the  extension  of  the  ar- 
rangement for  the  payment  of  the  Commission  from 
the  customs  revenues,  Judge  Thompson  returned  to 
Nicaragua  in  October,  1913.  Judge  Schoenrich,  on  Sep- 
tember 1st,  1913,  was  granted  a  leave  of  absence  with- 
out pay.  He  resumed  his  work  in  matters  of  the  Com- 
mission in  December,  1913,  and  sailed  for  Nicaragua  at 
the  end  of  the  same  month. 

After  resuming  its  regular  sessions  in  the  beginnin 
of  the  year  1914,  the  Commission  was  able  to  make  rapid 
progress  because  of  the  study  which  the  Commissioners 
had  given  to  the  various  cases.  Numerous  hearings  were 
held  and  awards  were  published  in  thousands  of  cases. 
More  than  !,<;<)»>  small  awards  were  paid  with  a  sum  as- 

ned  for  that  purpose  by  the  Government.  At  the  mid- 
dle of  July,  not  more  than  fifty  cases  remained  undecided, 
but  these  o»mprised  the  cases  which  required  most  study 
and  those  of  larger  amount  in  which  the  Government  had 
n<>t  filed  its  answer. 

On  account  "f  ill  health  Judge  Thompson  was  obliged 
Uo  sail  on  July  22d,  for  Panama,  and  later  for  the  United 


37 

States,  returning  to  Nicaragua  about  the  middle  of  No- 
vember.   Judges  Schoenrich  and  Cuadra  Pasos  remained 
in  Managua  and  drafted  the  judgments  of  several   im- 
portant eases  in  the  form  agreed  upon   before  the  de- 
parture of  Judge  Thompson,  held  hearings  in  other  c 
prepared  the  drafts  of  decisions  in  cases  submitted  by  the 
Government  at  the  last  moment,  and  made  the  necessary 
preparations  for  the  conclusion  of  the  work  of  the  ( 
mission. 

As  soon  as  Judge  Thompson  returned,  the  work  was 
formally  concluded  and  the  sessions  of  the  Cumini 
closed. 

VIII.  WORK  ACCOMPLISHED  BY  THE  Mixn* 
COMMISSION. 

Under  the  various  laws  passed  by  the  Nicaragua!! 
Congress,  with  reference  to  the  Mixed  Commission,  the 
time  for  filing  claims  expired  on  July  8th,  I!*!:!.  An  ex- 
ception was  made  in  claims  arising  out  of  the  cancella- 
tion of  concessions,  which  were  to  be  filed  within  six 
months  after  the  concessionary  was  notified  of  the  can- 
cellation, even  though  such  notification  might  take  place 
subsequent  to  July,  1913.  No  time  was  fixed  within 
which  the  Government  of  Nicaragua  must  present  the 
suits  it  might  desire  to  file  against  concessionaries. 

The  first  claim  was  filed  in  June,  1911.  In  the  last 
months  of  the  same  year  the  larger  portion  of  the  war 
claims  of  1909-1910  were  submitted  to  the  Commission 
after  having  been  passed  on  by  the  War  Department, 
and  others  were  sent  about  the  middle  of  1912.  The 
war  of  1912  gave  rise  to  more  than  two  thousand  new 
claims  which  were  filed  in  the  first  half  of  the  year  r.M:i. 
In  the  final  days  of  the  period  within  which  claims  might 
be  filed,  hundreds  of  cases  were  presented.  In  August, 
1914,  the  Government  of  Nicaragua  filed  two  suits  again >t 
concessionaries  and  subsequently  another  claim  was  filed 
against  the  Government  under  a  special  act  of  the  Na- 
tional Assembly  extending  the  term  for  the  claimant.* 


38 


Finally,  on  September  29th,  1914,  the  Executive  referred 
to  the  Commission  one  hundred  and  forty  cases,  stating 
that  they  had,  within  the  time  provided  by  law,  been  pre- 
sented by  mistake  to  the  Executive  instead  of  to  the  Com- 
mission. Notwithstanding  the  irregularity,  the  Commis- 
sion also  rendered  judgment  in  these  cases. 

The  total  number  of  cases  filed  is  7,911.     Of  these, 
three  are  suits  filed  by  the  Government  of  Nicaragua  and 
the  other  7,908  are  claims  against  the  Government  of 
Nicaragua.     As  will  appear  from  the  statistics  at  the  be- 
ginning of  this  report,  the  amount  claimed  is  C$13,808,- 
161.00- and  the  amount  awarded  C$1,840,432.31.     All 
the  original  judgments  are  attached  to  the  papers  of  the 
respective  cases.    The  first  name  signed  shows  which  one 
of  the  Commissioners  drafted  the  decision.     The  work 
of  drafting  decisions  was  not  equally  distributed,  but 
each  Commissioner  drafted  as  many  judgments  as  he 
possibly  could,  without  reference  to  the  work  of  the 
others,  and  with  the  single  object  of  concluding  the  work 
of  the  Commission  as  soon  as  possible.    The  amount  oi 
each  claim  and  the  amount  awarded  in  each  case  are  als< 
indicated  in  two  registers  of  the  Commission :  the  regist< 
of  cases  and  the  register  of  judgments  or  book  of  award* 
These  registers,  as  also  the  papers  of  the  cases  and  oth< 
books  and  archives  of  the  Commission,  will  be  delivere< 
to  the  official  of  the  Republic  whom  the  Executive  ma] 
designate. 

It  is  a  remarkable  fact  that  all  the  judgments  wen 
rendered  by  unanimity  of  votes  of  the  Commission.  Not- 
withstanding the  enormous  number  and  great  variety  oi 
cases,  there  was  a  constant  and  very  pleasant  harmony 
among  the  members  of  the  Commission.  There  were 
frequently  differences  of  opinion,  but  upon  discussion  it 
was  always  possible  to  arrive  at  an  agreement  acceptable 
to  all.  This  unanimity  in  the  awards  was  due  in  great 
measure  to  the  method  of  adopting,  at  the  first  session, 
several  general  rules  with  regard  to  responsibility  of  the 
Government,  and  applying  these  rules  in  the  various  cases, 

will  be  hereinafter  explained. 


39 


The  awards  of  the  Commission  were  expressed  in 
cordobas,  the  cordoba  being  the  new  monetary  unit  of 
Nicaragua,  equal  to  the  American  dollar.  A  few  judg- 
ments drafted  in  the  beginning,  before  the  cordoba  was 
adopted  as  the  Nicaraguan  unit,  were  given  in  gold,  as 
well  as  several  others,  where  it  was  proper  to  return  sums 
delivered  in  gold  or  where  there  were  other  special  cir- 
cumstances. The  cases  in  which  the  debt  was  n 
nized  in  gold  are  few  and  exceptional.  It  was  the  idea 
of  the  Commission,  nevertheless,  that  its  awards  should 
have  a  gold  value,  and  if  the  judgments  were  exnre 
in  cordobas,  this  was  done  because  the  cordoba  was 
established  as  equal  to  gold  and  has  been  so  maintained. 

Besides  the  assistance  rendered  to  the  Government  of 
Nicaragua  by  the  Commissioners,  as  individuals,  and  out- 
side of  the  time  taken  up  in  making  payments,  the  atten- 
tion of  the  Commission  has  been  divided  between  the 
study  of  concessions  and  contracts  and  the  study  of 
claims  for  other  causes. 

1.  Concessions  and  Contracts. 

Without  doubt,  the  most  important  matters  submitted 
to  the  Commission  involved  concessions  and  contracts 
made  by  the  previous  Governments  of  the  Republic. 
From  the  study  of  such  concessions,  it  was  evident  that 
during  the  administration  of  President  Zelaya,  many  un- 
constitutional, illegal  or  imprudent  privileges  had  been 
granted,  which  were  insufficiently  beneficial,  or  were  even 
harmful,  to  the  people  of  Nicaragua.  The  Commi.- 
obtained  the  modification  of  some  of  these  concessions, 
declared  others  lapsed  upon  petition  of  the  Government 
of  Nicaragua,  and  decided  claims  founded  on  the  can- 
cellation of  others. 

(a)   Concessions  Compromised. 

Under  the  law  creating  the  Commission,  the  President 
of  Nicaragua  was  to  cancel  concessions  regarded  as  illegaf 


40 


ipply 

r-r^n  — 


or  unconstitutional,  and  the  concessionaries  were  to  appl 
for  redress  to  the  Commission,  and  in  case  a  new  con- 
cession was  granted  in  the  same  matter,  the  previous  con- 
cessionary was  to  be  preferred  if  he  had  special  equip- 
ment or  experience.  The  officials  of  the  Government,  as 
well  as  the  members  of  the  Commission,  took  the  view 
that  if  compromises  could  be  affected  by  which  the  ob- 
jectionable features  of  the  concessions  were  eliminated, 
the  result  would  be  the  most  satisfactory  solution  of  the 
problem.  It  usually  appeared,  however,  that  while  both 
the  Government  and  the  concessionaries  expressed  them- 
selves as  desirous  of  a  friendly  settlement,  both  parties, 
and  especially  the  concessionaries,  were  determined  in 
their  respective  positions.  In  several  cases  the  Govern- 
ment requested  the  members  of  the  Commission  to  act  in 
a  semi-official  capacity  of  friendly  mediators.  As  such 
mediators,  they  were  able  to  bring  about  compromises  i 
several  concessions  of  great  importance. 

The  most  important  concessions  so  settled  constitute 
a  group  of  six,  which  were  known  as  the  "Deitrich  Con- 
cessions." They  had  originally  been  granted  to  a  pro- 
moter named  Deitrich,  who  had  formed  companies  i 
which,  as  it  later  turned  out,  he  retained  control,  and  th 
stock  of  which  he  had  sold  or  tried  to  sell  to  the  genera 
public.  These  concessions  contained  several  provision 
that  appeared  to  be  in  conflict  with  the  Nicaraguan  con 
stitution  and  laws,  but  the  principal  objection  to  them  was 
that  the  rights  they  granted  were  far  too  broad.  It 
probable  that  in  a  few  years  they  would  have  develope 
into  formidable  and  odious  monopolies.  The  companie 
owning  them  had  spent  some  money  in  preparatory  wor 
and  entertained  great  hopes  for  the  future,  so  that  it  wa 
evident  that  no  cancellation  of  these  concessions  would 
be  possible  without  struggles  and  great  expense  to  the 
Government.  After  weeks  of  negotiations  the  two  mem- 
bers of  the  Commission  who  were  in  Nicaragua  in  the 
latter  part  of  1911  were  able  to  secure  a  compromise  that 
appeared  just  to  all  parties.  Practically  all  that  was 
granted  by  the  Government,  in  this  compromise,  was  the 


41 

acceptance  as  sufficient  of  the  reasons  advanced  1,\   the 
concessionaries  for  not  concluding  certain  work   within 
the  time  specified  in  their  contract.     The  companies,  on 
their  part,  accepted  substantial  modifications  with   ref- 
erence to  five  concessions  and  renounced  all  rights  as  i<> 
the  sixth.    These  concessions  were  the  following : 
^  (1)   A  concession  held  by  the  "European  American 
Finance  and  Development  Company"  for  the  sale  of  Gov- 
ernment land  and  the  promotion  of  immigration  in  the 
Rio  Grande  district.     Under  this  concession,  the  right  to 
sell  one  million  hectares  of  Government  land  had  been 
granted,  but  the  Government  deemed  this  amount  of  land 
too  great,  and,  accordingly,  a  reduction  of  10  per  cent, 
was  made.    According  to  the  original  contract,  the  com- 
pany was  entitled  to  issue  land  bonds,  being  obliged  to 
pay  the  Government  $15.00  gold  for  every  bond  it  sold 
and  make  payment  within  two  years.     Under  the  new 
agreement,  all  the  payments  were  to  be  made  within  three 
months,  and  it  was  provided  that  in  case  of  failure  to 
pay  within  the  time  specified,  the  company  was  to  lose 
all  right  to  the  sale  of  the  land  bonds  on  which  the  Gov- 
ernment had  not  received  the  corresponding  payments, 
and  such  bonds  were  to  revert  to  the  Government. 

(2)  A  concession  held  by  the  "Agriculture  and  Min- 
ing Company  of  Nicaragua,"  for  the  dredging  of  the 
bar  of  the  Rio  Grande,  the  development  of  the  banks 
of  the  river,  and  the  building  of  a  wharf  and  warehouse 
at  its  outlet.  This  was  a  far-reaching  concession,  the 
principal  feature  of  which  was  the  right  to  build  a  wharf 
at  the  mouth  of  the  Rio  Grande  and  charge  wharfage  on 
everything  passing  in  and  out  of  the  river  for  a  period 
of  thirty  years.  During  the  next  ten  years  the  concession 
would  probably  not  have  been  a  burden  for  the  district, 
but  later  the  rights  it  involved  would  probably  have  be- 
come very  irksome.  For  these  reasons  it  was  provided 
in  the  compromise  that  the  wharf  fees  must  be  referred 
to  and  approved  by  the  Government  and  that  the  Govern- 
ment might  grant  exemptions  in  certain  cases.  The  con-^ 
cession  also  provided  that  the  company  might  charge  an* 


42 


impost  of  five  cents  on  every  bunch  of  bananas  exported 
from  that  region;  new  provisions  were  inserted  to  make 
this  privilege  clear,  and  to  reserve  to  the  Government  an 
important  part  of  the  amount  collected.  Other  important 
amendments  were  made  to  provide  greater  clearness  as 
to  the  rights  of  both  parties  and  to  reduce  certain  broad 
exemptions  from  customs  dues  and  other  taxes,  to  rea- 
sonable limitations. 

(3)  A  concession  held  by  the  "Company  General  of 
Central  America,  Atlantic  Pacific  Railway''  to  construct 
a  railroad  from  Matagalpa  to  a  navigable  point  on  the 
Rio  Grande  and  from  there  to  the  sea.     In  its  original 
form,  this  concession  was  so  broad  and  vague,  that  it 
permitted  the  construction  of  railroads  in  any  part  of 
the  country  with  the  right  to  occupy  great  tracts  of  pub- 
lic lands  and  the  prohibition  to  build  any  other  railroad 
within  thirty  miles  of  the  lines  of  this  company.     The 
amendments  comprised  in  the  new  agreement  reduced  the 
privileges  of  the  company  to  more  reasonable  limits  and 
provided  greater  clearness  as  to  the  rights  of  the  com- 
pany and  of  the  Government. 

(4)  and  (5)   Concessions  held  by  the  "Great  Southern 
Cattle  and  Land  Company"  for    the    establishment    of 
slaughterhouses  and  plantations  in  the  Rio  Grande  dis- 
trict.    Both  of  these  concessions  were  made  clearer  and 
a  reduction  was  made  in  the  exemptions  from  customs 
dues. 

((J)  A  concession  held  by  the  "Chinese-American 
Plantation  Company,"  for  the  importation  of  Chinese 
laborers  into  Nicaragua.  As  a  part  of  the  general  set- 
tlement, the  Company  renounced  all  rights  to  this  con- 
cession, and  submitted  to  its  annullment. 

The  settlement  of  these  concessions  cost  the  Govern- 
ment nothing,  but  on  the  other  hand,  if  the  concessionaries 
had  carried  out  their  contracts,  the  Government  would 
have  been  provided  with  money,  new  sources  of  revenue 
would  have  been  obtained,  and  a  region  which  is  now  but 
wilderness  would  have  been  developed.  Unfortunately, 
nhe  concessionaries  did  not  comply  with  their  promises. 


43 

The  Government's  drafts  issued  in  accordance  with  the 
land  bonds  concession,  were  protested,  and,  although  ex- 
tensions were  allowed,  the  company  has  paid  almost  noth- 
ing. In  the  other  concessions  also  the  concessionaries 
failed  to  begin  work  within  the  time  stipulated.  The  o  m- 
cessions  above  designated  as  (4)  and  (5)  expired  auto- 
matically, and  as  to  the  other  three,  the  Government  filed 
suit  before  the  Commission  to  declare  them  lapsed.  As 
will  be  hereinafter  explained,  the  Commission  declared 
such  annullment.  The  Government  has  thus  attained  its 
original  purpose  without  payment  of  damages  and  the 
concessionaries  have  no  ground  for  complaint. 

There  were  settlements  of  several  other  concessions, 
but  they  were  made  after  claims  had  been  filed  by  the 
respective  owners  of  the  concession,  and  reference  there- 
to will  be  made  further  on  in  this  report. 

(b)   Concessions  Declared  Lapsed  Upon  Suit  of  the 
Government. 

Article  12  of  the  law  of  May  17th,  1911,  provided  that 
the  Mixed  Commission  has  jurisdiction  also  over  claims 
to  be  made  by  the  Government  for  violations  committed 
by  the  holders  of  contracts  or  concessions.  Under  this 
provision,  the  Government  of  Nicaragua  filed  suit  against 
the  European  American  Finance  and  Development  Com- 
pany, on  July  19th,  1913,  against  the  Agriculture  and 
Mining  Company  of  Nicaragua,  on  August  6th,  1914,  and 
against  the  Company  General  of  Central  America,  At- 
lantic Pacific  Railway,  also  on  August  6th,  1914,  alleg- 
ing that  the  companies  failed  to  comply  with  the  condi- 
tions of  their  contracts  and  had  given  rise  to  the  nullity 
of  the  said  contracts  in  accordance  with  the  terms  thereof, 
wherefore  it  was  prayed  that  the  Commission  declare  the 
concessions  lapsed  and  void.  The  cases  are  numbered 
7,734,  7,769  and  7,770  in  the  register  of  this  Commission 
and  were  decided  by  judgments  No.  7,755,  7,898  and 
7,899,  respectively.  It  was  impossible  to  find  represen- 
tatives of  the  companies  in  Nicaragua,  although  two  of* 


44 


the  contracts  expressly  provided  that  a  fully  authorized 
representative  should  always  reside  in  the  country,  and 
the  Commission  was  obliged  to  publish  the  summons  in 
newspapers.  Publication  was  made  in  a  newspaper  of 
Managua  and  another  of  New  York.  The  Commission 
found  that  the  concessionaries  had  failed  to  comply  with 
their  obligations  and  declared  the  concessions  lapsed. 

(c)   Concessions  and  Contracts  on  which  Claims  were 

Based. 

As  a  result  of  the  general  irritation  produced  by  the 
great  number  of  concessions  which  had  been  granted  by 
President  Zelaya,  the  Government  of  Nicaragua  which 
emerged  from  the  Revolution  of  1909-1910,  at  first  con- 
sidered the  cancellation  of  all  concessions  of  whatever 
nature.  Later,  by  law  of  October  14th,  1911,  the  Na- 
tional Assembly  ordered  that  only  such  contracts  and 
concessions  as  were  illegal  or  unconstitutional  should  be 
cancelled.  The  Government  therefore  cancelled  merely 
those  concessions  which  it  believed  violated  the  consti- 
tution or  the  laws  because  of  involving  monopolies  or  for 
other  reasons.  The  Commission  is  not  apprised  as  to  the 
number  of  cancellations  decreed  by  the  Government,  but 
the  number  of  claims  filed  with  the  Commission  by  reason 
of  such  cancellations  was  nine. 

Eight  other  claims  were  filed  in  which  it  was  alleged 
that  the  present  Government  or  former  Governments  had 
failed  to  fulfill  their  contract,  and  one  claim  for  a  can- 
cellation decreed  by  President  Madriz. 

The  cases  relating  to  concessions  and  contracts  which 
were  decided  by  the  Commission  are  the  following,  stated 
in  the  order  in  which  the  judgments  were  rendered. 

(  1  )  Judgment  No.  2011 ;  Case  No.  5027.  Caligaris 
Pine  Timber  Concession.  Claim  for  $116,500.00  gold 
and  other  damages. 

r.y  concession  of  June  :2/,  1906,  approved  by  the  Na- 
tional Assembly  of  Nicaragua  on  January  8,  1908.  Angel 
•i.:iris.  an  Italian  subject,  was  given  the  exclusive  right 


45 

to  cut  pine  lumber  for  25  years  on  government  land  in 
a  large  area  on  the  eastern  coast  of  Nicaragua  paving 
a  designated  rental.  On  March  IS.  l  n  1 :>,  the  Government 
of  Nicaragua  cancelled  the  concession  whereupon  Cali- 
garis  filed  his  claim. 

In  April,  1913,  the  attorney  for  the  Government  of 
Nicaragua  and  Caligaris  announced  to  the  Commission 
that  they  had  compromised  the  case.  According  to  their 
agreement  the  concession  was  to  continue  in  force,  but 
with  sweeping  modifications.  The  zone  of  the  concession 
was  reduced  to  less  than  one-third  its  original  area;  the 
time  of  the  concession  was  reduced ;  a  large  cash  payment 
was  required  besides  a  rental;  certain  broad  exemptions 
from  customs  duties  were  made  to  expire  in  two  years; 
Caligaris  agreed  to  return  a  certain  amount  of  land  to 
the  Government  in  each  year,  even  though  the  timber  had 
not  been  cut;  and  the  rights  of  the  government  were 
made  more  clear  in  other  respects.  The  zone  of  the  con- 
cession still  appeared  large,  but  the  parties  stated  that  it 
contained  much  land  which  did  not  belong  to  the  Govern- 
ment and  much  land  on  which  there  was  no  pine  timber. 

The  compromise  reduced  the  concession  to  legal  pro- 
portions and  was  approved  by  the  Commission. 

(2)  Judgment  No.  2786;  Case  No.  1.    Lease  of  Gov- 
ernment Printing  Office.     Claim  for  $70,000.00  gold. 

Augusto  Mulct  de  Chambo,  a  Spanish  subject,  alleged 
that  in  1905  he  leased  the  Government  printing  office,  but 
that  in  1906  the  Government  of  Nicaragua  broke  the  con- 
tract and  sold  and  delivered  the  printing  office  to  a  com- 
pany, wherefore  he  claimed  damages. 

The  Commission  held  (a)  that  claimant  did  not  comply 
with  the  terms  of  his  contract  of  lease ;  (b)  that  claimant 
consented  to  the  rescission  of  the  contract  and  is  estopped 
from  demanding  damages;  and  (c)  that  the  evidence  in 
respect  of  damages  is  insufficient. 

The  claim  was  therefore  rejected. 

(3)  Judgment  No.  4366;  Case  No.  5135.     Ice  Con- 
cession.   Claim  for  $309,389.33  gold. 

The  Central  American  Commercial  Co.,  an  American 


46 

corporation,  was  the  owner  of  an  ice  concession,  granted 
in  1906,  according  to  which  this  company  had  the  ex- 
clusive right  of  manufacturing  ice  in  the  Republic  of 
Nicaragua  for  a  period  of  fifty  years.  On  March  15, 
1912,  the  Government  of  Nicaragua  cancelled  the  con- 
cession, whereupon  the  company  filed  its  claim  for  the 
amount  stated,  $309,389.33,  the  principal  items  being 
$40,000  as  the  value  of  the  plant  and  $250,000  as  the 
value  of  the  concession. 

The  Government  alleged  that  the  concession  was 
granted  in  violation  of  the  constitutional  provision  which 
forbids  monopolies.  The  company  contended  that  the 
concession  was  granted  in  accordance  with  the  constitu- 
tional provision  which  permits  temporary  privileges  in 
certain  cases. 

The  Commission  held  (a)  that  the  constitutional  pro- 
visions must  be  harmonized,  and  applied  in  the  light  of 
reason ;  (b)  that  the  concession  is  clearly  a  monopoly  pro- 
hibited by  the  constitution;  (c)  that  the  company  may 
continue  to  manufacture  ice  under  the  general  laws  of 
the  country;  (d)  that  the  company  is  not  entitled  to  dam- 
ages for  the  cancellation  of  an  unconstitutional  conces- 
sion; and  (c)  that  in  any  case  the  evidence  with  respect 
to  damages  is  insufficient. 

The  cancellation  of  the  concession  was  therefore  up- 
held and  the  claim  rejected. 

The  Company  retained  its  plant  and  has  since  continued 
t<>  manufacture  ice  in  accordance  with  the  general  laws 
of  the  country. 

(4)  Judgment  No.  4543;  Case  No.  l(5i>.  vSoap  Fac- 
i.'i-v  Concession.  Claim  for  C$41,01 4.C.5. 

Fernando  and  Manuel  Lacayo,  Nicaraguan  citizens. 
acquired  a  concession  granted  in  1891  involving  the  free 
importation,  during  a  period  of  ten  years,  of  machinery 
and  raw  materials  for  the  manufacture  of  soap,  candles 
and  perfumery.  In  ItMr*  the  Minister  of  Finance  ex- 
tended the  time  in  which  they  might  import  these  articles 
free  of  duty,  but  in  !'.»<);>  the  privilege  was  withdrawn. 
0For  this  reason  and  on  account  of  other  annoyances 


47 

which  they  alleged,  they  closed  their  factory,  \\-hirh  be- 
came an  almost  total  loss.     They  claimed  the  sum  ab 
mentioned  as  the  value   of   the   factory,   the   estimated 
profits,  and  the  customs  duties  they  were  required  to  pay. 

The  Commission  held  (a)  that  the  extension  of  permis- 
sion of  free  importation,  in  1902,  could  not.  under  the 
circumstances  of  the  case,  be  considered  an  extension  of 
the  original  contract  but  a  mere  privilege  revocable  at 
will;  (b)  that  the  granting  of  such  privilege  by  the  Min- 
ister of  Finance  was  illegal;  (c)  that  even  if  it  had  I 
approved  by  the  Executive,  it  would  have  been  ui: 
stitutional;  (d)  that  in  no  case  could  claimants  have  re- 
covered more  than  the  amount  of  the  customs  dm 
(e)  that  no  provocation  sufficient  for  the  abandonment  of 
the  factory  has  been  alleged  or  proved. 

The  claim  was  therefore  rejected. 

(5)  Judgment  No.  5118;  Case  No.  6081.  Aguar- 
diente Concession.  Claim  for  C$1,235,390.24. 

In  1903  the  Government  of  Nicaragua  farmed  out  its 
internal  revenue  on  aguardiente  (the  native  brandy),  and 
on  alcohol  and  other  spirits,  to  the  Compafiia  de  Aguar- 
diente Limitada,  a  Nicaraguan  corporation,  the  stock  of 
which  was  held  principally  by  Italian,  Spanish  and  Brit- 
ish capital.  The  original  period  of  the  lease  was  six 
years,  but  in  1908  was  extended  for  34  years.  During 
this  time  the  Company  was  to  administer  the  internal 
revenue  on  spirits  as  it  is  administered  in  Nicaragua, 
that  is,  it  was  to  have  the  sole  right  to  purchase  distilled 
liquors  from  the  manufacturers  and  to  sell  the  same  to 
the  public.  The  Company  frequently  advanced  or  lent 
large  sums  of  money  to  the  Government.  It  was  well 
administered  and  paid  large  dividends,  so  that  its  stock 
became  quite  valuable.  Its  gains  were  so  great  as  to 
arouse  public  indignation,  and  the  concession  constituted 
one  of  the  causes  of  the  revolution  of  1909  against 
Zelaya.  In  April,  1910,  the  Madriz  Government  issued 
a  decree  canceling  the  concession,  and  seized  727,r>!>:, 
liters  of  aguardiente  and  alcohol  belonging  to  the  Com- 
pany, as  well  as  all  the  Company's  apparatus,  tanks,  fur- 


48 

niture  and  other  property.    The  Company  therefore  filed 
its  claim  in  the  following  form : 

A.  Value  of  the  aguardiente,  alcohol,  and 

other  property  of  the  Company, 
seized  by  the  Government,  with 
interest  C$320,082.23 

B.  Amounts  advanced  or  loaned  to  the 

Government,  with  interest 162,508.01 

C.  Value  of  the  concession 852,800.00 


Total    C$1,235,390.24 

In  April,  1914,  the  Government  and  the  Company 
reached  a  compromise  according  to  which  the  Govern- 
ment is  to  pay  the  Company,  as  indemnity  in  full,  the 
sum  of  $276,275.00  gold.  This  amount  is  approximately 
the  value  of  the  property  of  the  Company  seized  by  the 
Government  and  the  amounts  advanced  or  loaned  by  the 
Company  to  the  Government,  without  making  any  allow- 
ance for  interest  or  for  the  value  of  the  concession. 

The  compromise  was  advantageous  for  the  Govern- 
ment and  was  approved  by  the  Commission. 

(6)  Judgment  No.  5321;  Case  No.  7736.  San  Juan 
del  Sur  Wharf  Concession.  Claim  for  $70,000  gold. 

The  Compania  Limitada  del  Muelle  y  Agencia  de  San 
Juan  del  Sur,  a  Nicaraguan  corporation,  was  the  owner  of 
a  concession  granted  in  1904  for  the  building  of  a  wharf 
in  the  port  of  San  Juan  del  Sur,  and  for  its  exploitation 
during  the  period  of  30  years.  In  May,  IDL'J,  the  Gov- 
ernment canceled  the  concession  and  the  company  brought 
this  claim  for  the  value  of  the  wharf  and  of  the  conces- 
sion. 

In  the  beginning  of  1914  the  Government  and  the 
company  reached  a  compromise  according  to  which  the 
company  accepted  the  cancellation  and  sold  the  wharf 
and  all  its  rights  thereto  to  the  Government  for  the  sum 
of  $15,000  gold,  this  sum  to  be  paid  out  of  the  proceeds 
of  the  wharf,  which  is  to  be  administered  by  the  Collector 
General  of  Customs. 


49 

The  compromise  was  legal  and  was  approved  by  the 
Commission.  The  wharf  was  on  June  1,  HM4.  turned 
over  to  the  Collector  General  of  Customs.  \\h<>  is  ii<>\v 
collecting  the  wharf  dues,  and  paying  them  to  the  com- 
pany on  account  of  the  purchase  price.  The  wharf  dues 
amount  to  between  $500  and  $600  a  month,  and  tin's 
wharf  will  therefore  be  paid  for  in  about  two  years. 

(7)  Judgment  No.   0385;  Case  No.   7655,      Aguar- 
diente sub-contract.     Claim  for  $24,000  gold. 

Jorge  Deshon,  an  American  citizen,  claimed  to  be  the 
assignee  of  a  contract  made  with  the  Compania  de  Aguar- 
diente Limitada,  which  had  the  aguardiente  concession, 
for  providing  the  Company  with  aguardiente  in  certain 
towns.  When  the  Government  canceled  the  aguardiente 
concession,  the  Company  no  longer  carried  out  this  sub- 
contract. 

The  Commission  held  that  the  claimant  has  no  case 
against  the  Government  of  Nicaragua:  (a)  because 
there  was  no  privity  of  contract  between  the  claimant 
and  the  Republic  of  Nicaragua;  (b)  because  claimant 
has  not  proved  that  he  is  the  assignee  of  the  sub-con- 
tract; (c)  because  several  documents  offered  in  evidence 
are  not  properly  authenticated;  (d)  because  it  does  not 
appear  that  the  sub-contract  was  legally  binding  on  the 
aguardiente  company;  (e)  because  there  is  no  proof  of 
the  cancellation  of  his  contract;  (f)  because  the  aguar- 
diente company  has  accepted  the  cancellation  of  its 
concession;  and  (g)  because  there  is  no  proof  of  dam- 
ages. 

(8)  Judgment  No.  6500;  Case  No.  6220.     Contract 
for  maintenance  of  telegraph  line.    Claim  for  C$S,7 1  <».r>0. 

Erwin  Kneifel,  an  Austrian  subject,  as  assignee  of  the 
rights  of  Isaac  Toledo,  alleged  that  in  October,  1010,  To- 
ledo made  a  five-year  contract  with  the  Government  Tele- 
graph Office  for  the  maintenance  of  the  telegraph  line 
from  San  Carlos  to  San  Juan  del  Norte,  and  that  in  con- 
sequence of  Toledo's  participation  in  the  events  con- 
nected with  the  resignation  of  President  Estrada  in  May, 
1911,  the  Government  illegally  cancelled  the  contract. » 


50 

The  Commission  held:  (a)  that  the  contract  of  Oc- 
tober, 1910,  was  not  made  in  accordance  with  law;  (b) 
that  the  evidence  is  unsatisfactory;  and  (c)  that  there 
is  no  proof  of  the  cancellation  of  the  contract  nor  the 
reasons  therefor. 

(9)  Judgment  No.  7542;  Case  No.  5139.     Commer- 
cial Agency  Concession.    Claim  for  $400,000  gold. 

The  Central  American  Commercial  Co.,  an  American 
corporation,  filed  this  claim  on  account  of  two  contracts 
made  between  the  Government  of  Nicaragua  and  T.  M. 
Solomon,  in  September,  1902,  and  April,  1904. 

Under  these  contracts  the  Government  appointed  Solo- 
mon its  commercial  agent,  agreed  that  until  April,  1914, 
his  agency  was  to  have  the  exclusive  right  to  the  Gov- 
ernment's orders,  and  that  during  the  said  period  the 
agency  was  to  receive  a  commission  of  5  per  cent,  on 
all  orders  of  the  Government  whether  given  to  the  agency 
or  to  any  other  merchant  or  agent.  Solomon  on  the  other 
hand  promised  to  open  a  credit  in  favor  of  the  Govern- 
ment to  the  amount  of  $80,000  gold.  In  1906  the  Gov- 
ernment began  to  give  its  orders  to  other  merchants  who 
offered  to  take  them  at  lower  commissions,  and  the  claim- 
ant company  demanded  the  5  per  cent,  commission  on 
all  such  orders. 

The  Commission  held:  (a)  that  the  claimant  company 
had  not  complied  with  the  rules  of  the  Claims  Commis- 
sion; (b)  that  it  does  not  appear  that  the  claimant  com- 
pany has  ever  acquired  any  interest  in  the  said  con- 
tracts; (c)  that  the  said  contracts  were  not  made  with 
the  formalities  required  by  law;  (d)  that  there  is  no  evi- 
dence with  respect  to  damages. 

(10)  Judgment  No.  7900;  Case  No.  <K)82.     Sale  of 
the  National  Printing  Office.     Claim   for  C$84,356.38. 

On  June  22,  1900,  the  Compania  Tipografica  In- 
tcrnacional,  a  Nicaraguan.  corporation,  purchased  from 
the  Government  of  Nicaragua  the  ''National  Printing 
Office  and  Bindery"  for  $1  !».<)()()  gold,  which  sum  was 
to  be  paid  with  ;">()  per  cent,  of  the  value  of  the  work  to  be 
t  done  fur  the  ('.uveniment  in  the  company's  shops.  On 


51 

April  7,  1911,  the  Executive  cancelled  tin-  contract  of 
sale  on  the  ground  of  illegality,  and  a  few  days  later  the 
Government  took  possession  of  the  shops  of  t; 
pania  Tipografica.  The  company  presented  its  claim  be- 
fore the  Commission  asking  for  the  return  of  the  former 
National  Printing  Office  or  for  the  payment  of  $10,000 
gold,  and  also  asking  for  an  indemnity  of  $816,954.75 
national  paper  currency  for  damages  suffered. 

On  October  31,  1914,  after  the  case  had  been  heard, 
the  Government  and  the  company  made  a  compromise 
according  which  the  Government  agreed  to  concede  to 
the  company  the  sum  of  $25,000  gold,  and  the  company 
accepted  this  sum  in  lieu  of  all  indemnity  and  further 
obligated  itself  to  deliver  to  the  Government  the  ma- 
chinery and  tools  corresponding  to  a  section  of  its  shops 
which  it  had  not  acquired  from  the  Government,  and  the 
value  of  which  it  guaranteed  to  be  not  less  than  $5,000 
gold. 

The  Commission  approved  the  compromise. 

(11)  Judgment  No.  7901;  Case  No.  2.     School  Text 
Book  Contract.     Claim  for  $10,000  gold. 

By  contracts  of  October  30,  1889,  and  March  24,  1900, 
Dr.  Belisario  Porras,  a  Panamanian  citizen,  who  in  ac- 
cordance with  an  offer  of  the  Government  of  Nicaragua 
had  written  a  book  on  the  geography  of  the  country, 
agreed  with  the  Government  for  the  publication  of  said 
book  and  its  adoption  as  text  book  in  the  national  schools. 
The  Government  received  the  manuscript  but  never  pub- 
lished the  work,  for  which  reason  this  claim  was  filed. 

The  claimant  being  President  of  the  Republic  of  Pan- 
ama, and  the  Government  of  Nicaragua  believing  the 
claim  meritorious,  there  was  a  desire  to  make  a  friendly 
settlement.  The  Government  of  Nicaragua  agreed  to 
concede  to  the  claimant  in  lieu  of  all  indemnity  the  sum 
of  C$8,000. 

The  Commission  approved  the  agreement,  stating  that 
it  is  understood  to  comprise  both  the  value  of  the  damages 
and  of  the  manuscript. 

(12)  Judgment  No.  7902;  Case  No.  5.     Rubber  Con-i 
cession.     Claim  for  $35,000  gold. 


52 


Carlos  Bohnenblust,  a  Swiss  citizen,  alleged  that  by 
contracts  made  in  September  and  November,  1907,  and 
February,  1908,  the  Government  of  Nicaragua  granted 
to  various  Nicaraguan  citizens  the  exclusive  right  of  ex- 
ploiting during  eight  years  the  rubber  trees  belonging  to 
the  Government  in  the  Departments  of  Jerez  and  Rivas 
and  the  districts  of  Siquia  and  San  Juan  del  Norte;  that 
on  January  8,  1910,  the  Madriz  Government  suspended 
the  rubber  contracts  of  Chontales  and  Rivas;  that  the 
Revolution  of  1909  to  1910  rendered  the  contracts  rela- 
tive to  the  rubber  trees  of  Siquia  and  San  Juan  del  Norte 
ineffective;  and  that  by  deed  of  September  20,  1911,  the 
rights  derived  under  the  said  contracts  were  transferred 
to  the  claimant  Bohnenblust. 

The  Commission  besides  referring  to  the  doubts  ex- 
isting with  reference  to  the  validity  of  the  said  contracts, 
declared:  (a)  that  the  evidence  is  deficient  and  defective, 
and  (b)  that  the  claimant  knowingly  bought  a  law  suit. 

The  claim  was  therefore  rejected. 

(13)  Judgment  No.  7903;  Case  No.  5136.  Rio  Escon- 
dido  Navigation  Concession.  Claim  for  $471,529.83 
gold. 

The  Bluefields  Fruit  &  Steamship  Co.,  an  American 
corporation,  presented  this  claim  as  successor  to  the  Blue- 
fields  Steamship  Co.,  Ltd.  This  company  was  the  owner 
of  a  concession  granted  it  in  1904,  which  gave  it  the  ex- 
clusive right,  for  2,~>  years,  to  navigate  by  steam,  naphtha, 
electricity  or  alcohol,  on  the  Escondido  River  and  its  af- 
fluents, paying  the  Government  an  annual  sum  of  $15,000 
gold. 

The  Escondido  River  and  its  affluents  flow  through  a 
fertile  region,  the  most  developed  portion  of  the  east 
coast  of   Xirara-tia,   where  there  are  many  plantations. 
Because  <>f  its  strong  current,  its  high  banks  and  its  many 
curves,  it  can  only  with  difficulty  be  ascended  l>v  sailing 
els,  and,  furthermore,  since  the  products  of  the  plan- 
tations are  almost  exclusively  bananas  and  other  fruits, 
the  planters  require  the  most  rapid  transportation  facili- 
ties.    The  company  thus  in  effect  had  the  exclusive  right 


53 


of  traffic  on  the  said  river.     This  concession  pn>v«.kcd 
great  irritation  among  the  inhabitants  of  the  east  < 
and  was  one  of  the  causes  of  the  revolution  of  I'.MMI. 

On  March  14,  1912,  the  Government  cancelled  the  con- 
cession, whereupon  the  company  presented  its  claim,  the 
principal  items  of  which  were    an   item    for    estimate*  1 
profits  during  the  remainder  of  the  term  of  the  col 
sion,  and  another  for  annuities  paid  the  G<  nt  while 

the  company  enjoyed  its  rights. 

The  Commission  held:  (a)  that  the  company  violated 
the  rules  of  procedure  of  the  Commission;  (b)  that  tin- 
evidence  is  very  deficient;  (c)  that  the  concession  involves 
a  monopoly  prohibited  by  the  Constitution;  fd)  that 
the  concession  also  violates  the  Civil  Code  that 

judgments  of  higher  courts  of  Nicaragua  have  already  de- 
clared the  illegality  of  the  concession;  (f)  that  future 
profits  cannot  be  claimed  under  an  illegal  contract;  (g) 
that  the  value  of  the  annuities  paid  by  the  compan 
compensated  by  the  benefits  which  it  derived  from  the 
concession;  (h)  that  one  of  the  clauses  of  the  contract 
provides  that  the  company  cannot  make  claim  if  by  force 
majeure  or  judicial  decision  the  Government  should  be 
compelled  to  suspend  or  rescind  the  contract. 

The  cancellation  of  the  concession  was  therefore  sus- 
tained and  the  claim  rejected. 

Several  other  items  of  the  same  claim  alleging  denial 
of  justice,  damages  inflicted  by  strikers,  and  losses  suf- 
fered because  of  war,  were  also  rejected. 

(14)  Judgment  No.  7907;  Case  No.  5003.  I.n  Villc- 
beuvre  Mining  Concession.  Claim  for  $7  ! ". .-'  old. 

On  December  0,  1907,  R.  J.  La  Villebeuvre  was 
exclusive  mining  rights  in  a  zone  of  467  square  miles 
in  the  jurisdiction  of  Prinzapolka,  in  the  eastern  portion 
of  Nicaragua,  for  30  years,  and  a  few  days  later  th«j 
concessionary  transferred  his  rights  to  Julian  Irias.     At 
a  later  date  the  Mining  Exploration  Company,  an  An 
can  corporation,  obtained  an  option  on  the  saiV 
sion,  and  after  the  expiration  of  the  option,  purch; 
the  concession  from  Dr.  Irias  in  March,  ll'l  1       While 


54 


holding  the  option  the  company  made  expensive  explora- 
tions in  the  zone.  On  March  18,  1912,  the  Government 
cancelled  the  concession,  whereupon  the  company  pre- 
sented this  claim  for  $238,181.96  for  expenditures 
which  it  alleged  it  incurred,  and  $509,400  gold  for  the 
value  of  the  land,  claiming  also  the  value  at  which  the 
future  profits  may  be  estimated. 

The  Commission  held:  (a)  that  the  concession  was 
granted  in  violation  of  the  Mining  Code  which  does  not 
permit  the  concession  of  zones  of  more  than  four  square 
miles;  (b)  that  the  company  acquired  the  concession  after 
having  been  notified  that  the  Government  would  not  rec- 
ognize the  transfer  because  of  the  illegality  of  the  con- 
tract; (c)  that  the  accounts  presented  by  the  company 
comprise  items  which  have  no  connection  with  the  con- 
cession; (d)  that  it  is  not  proper  to  grant  indemnity  for 
the  value  of  the  concession;  and  (e)  that  it  is  equitable  to 
grant  the  company  C$20,000  for  certain  disbursements 
made  by  it. 

(15)  Judgment  No.  7908;  Case  No.  5143.     Ander- 
son Pine  Timber  Concession.     Claim    for    $1,134,700 
gold. 

By  concession  of  September  1,  1905,  amplified  by  an- 
other contract  of  April  17,  1907,  Lomax  S.  Anderson, 
an  American  citizen,  was  granted  the  exclusive  right  of 
cutting  pine  timber  on  Government  land  in  a  zone  of 
8,000  square  miles  in  the  northeastern  part  of  the  Re- 
public, for  50  years,  paying  a  stipulated  annual  sum.  The 
concession  carried  other  very  broad  privileges  and  was 
equivalent  to  placing  the  development  of  the  entire  region 
in  the  power  of  the  concessionary.  Anderson  transferred 
his  rights  to  the  Louisiana  Nicaraguan  Lumber  Co.,  an 
American  corporation.  On  March  30,  1912,  the  Gov- 
ernment cancelled  the  concession  whereupon  the  company 
filed  this  claim,  the  principal  item  of  which  was  one  of 
$840,000  gold  for  estimated  future  profits. 

The  Commission  held:  (a)  that  the  concession  in  ef- 
fect constitutes  a  monopoly  prohibited  by  the  Constitu- 
tion; (b)  that  there  is  a  lamentable  lack  of  evidence; 


55 


(c)  that  in  view  of  the  circumstances  of  the  case  il  is 
equitable  that  the  Government  repay  $r,:>.oon  gold  whirl) 
it  has  received  from  the  company. 

(10)  Judgment  No.  7909;  Case  No.  .Mil.  U 
Navigation  and  Mining  Concessions.  Claim  foi 
134.81  gold. 

The  United  States  and  Nicaragua  Co.,  an  American 
corporation,  was  the  owner  of  five  contracts  which  in  ef- 
fect delivered  to  the  company  until  the  year  1953  a  strip 
of 'about  7,000  square  miles  in  the  northern  part  of  the 
Republic.  The  said  contracts  were  (1)  contract  of  Aug- 
ust 22,  1899,  granting  the  exclusive  privilege  of  steam 
navigation  on  the  Coco  River  and  its  affluents  f"i 
years;  (2)  contract  of  August  15,  1901,  granting  the 
right  to  establish  tramway  lines  around  the  rapids  of 
the  Coco  River;  (3)  contract  of  January  7,  1903,  grant- 
ing exclusive  mining  rights  in  a  large  region  in  the  north- 
ern part  of  the  Republic  for  25  years,  the  right  to  operate 
a  railroad  and  other  important  privileges;  (4)  contract 
of  January  16,  1903,  granting  the  right  to  construct  and 
to  operate  for  50  years  a  wharf  at  the  mouth  of  the  C 
River  and  collect  wharfage  for  every  passenger  and  f •  >r 
all  merchandise  imported  or  exported  by  way  of  the 
Coco  River  or  any  of  its  affluents  or  branches  during  the 
aforesaid  period,  as  well  as  other  important  privik 
(5)  contract  of  June  18,  1906,  approved  January  '.)(.>. 
1908,  granting  the  right  to  open  a  channel  at  the  mouth 
of  the  Coco  River  and  collect  live  cents  gold  on  every 
bunch  of  bananas  embarked  for  exportation.  The  com- 
pany spent  large  sums,  but  its  affairs  were  badly  n 
aged  and  it  suffered  considerable  loss.  In  the  \\ 
difficulties  arose  with  the  Government  and  the  latter  insti- 
tuted legal  proceedings  alleging  that  the  company  had 
failed  to  comply  with  its  obligations.  The  company  then 
withdrew  from  the  country. 

By  decrees  of  March  29,  1912,  and  April   l:;,    1!H:J. 
the  Executive  cancelled  the  concession.     The  company 
presented  this  claim,  which  it  did  not  base  on  the  cancella- 
tion but  on  the  legal  proceedings  instituted  by  the  ( 
ernment  in  the  year  1908. 


56 


The  Commission  held:  (a)  that  there  is  a  lack  of  es- 
sential evidence;  (b)  that  the  Government  was  acting 
within  its  rights  when  it  instituted  proceedings  in  1908 ; 
(c)  that  the  concession  constitutes  a  monopoly  prohibited 
by  the  Constitution;  (d)  that  the  Government  should 
return  to  the  company  the  sum  of  $100,000  gold  which  it 
received  as  a  loan,  and  a  further  sum  equivalent  to  $4,000 
gold,  which  it  received  as  a  deposit  and  for  the  return  of 
which  it  has  long  since  acknowledged  liability. 

(17)  Judgment  No.  7910;  Case  No.  7440.  Pearl  La- 
goon Concession.  Claim  for  $1,793,865.31  gold. 

By  contract  of  July  24,  1906,  approved  by  the  Na- 
tional Assembly  January  14,  1908,  the  Government 
granted  to  A.  F.  Piazza,  as  representative  of  the  Central 
American  Growers  &  Transportation  Co.,  a  concession 
for  dredging  the  bar  at  the  entrance  of  Pearl  Lagoon. 
The  company  was  to  begin  dredging  within  one  year  and 
finish  the  work  within  three  years,  construct  a  custom 
house  and  wharf  and  establish  a  navigation  line,  receiv- 
ing in  return  the  right  to  take  up  40,000  manzanas  of 
public  land,  to  collect  wharf  dues,  to  be  exempt  from  cer- 
tain customs  dues  and  to  enjoy  other  valuable  privileges. 
The  concession  was  later  transferred  to  the  Atlantic 
Fruit  &  Steamship  Co.,  which  in  turn  transferred  it  to 
the  Atlantic  Fruit  Co.  The  three  companies  are  Ameri- 
can corporations. 

The  companies  took  up  18,000  manzanas  of  public 
lands  and  tried  to  obtain  more,  enjoyed  other  privileges 
of  the  contract,  and  established  important  plantations,  but 
never  dredged  the  bar  nor  began  the  work  seriously,  and 
did  not  construct  the  wharf  of  the  dimensions  required 
by  the  contract. 

On  March  29,  1912,  the  Executive  cancelled  the  con- 
cession whereupon  the  said  companies  filed  this  claim,  the 
principal  items  <»f  which  were  one  of  $713,505.29  gold 
for  disbursements,  which  they  allege  they  made,  and  an- 
other of  $1,070,258.62  gold  for  estimated  future  profits. 
The  Government  presented  a  counterclaim. 

The  Commission  held  :  (a)  that  the  claimant  companies 


57 

have  failed  to  comply  with  their  obligations ;  (1»  that 
because  of  such  failure  it  is  proper  t<>  accede  to  tin-  ; 
tion  of  the  Government  to  declare  the  contract  rescinded  ; 
(c)  that  it  is  not  necessary  to  consider  whether  the 
tract  was  legal  or  illegal;  (d)  that  the  claimants  have  no 
right  to  claim  for  estimated  future  profits;  (e)  that  it  is 
not  equitable  to  grant  the  request  of  the  companies  that 
the  Government  reimburse  all  their  expenses  n«.r  that  of 
the  Government  that  all  grants  of  land  to  the  companies 
be  annulled;  and  (f)  that  under  the  circumstance-  of 
the  case  it  is  proper  to  declare  that  the  Government  ha 
pecuniary  liability  with  respect  to  the  claimants,  and  that 
these  have  no  such  liability  with  respect  to  the  Govern- 
ment, and  that  the  Atlantic  Fruit  Co.  may  retain  such 
lands  as  were  obtained  before  the  cancellation  of  the  con- 
cession. 

(18)  Judgment  No.  7911;  Case  No.  5138.  Corinto 
Wharf  Concession.  Claim  for  $1,721,860  gold. 

On  February  5,  1902,  the  Government  of  President 
Jose  Santos  Zelaya  granted  to  Luis  A.  Cousin  a  contract 
conceding  the  right  to  construct  a  wharf  in  the  port  of 
Corinto  and  collect  wharfage  for  50  years,  it  being  pro- 
vided that  all  merchandise  imported  and  exported  must 
pass  over  the  wharf  and  that  no  other  wharf  can  be  con- 
structed at  a  less  distance  than  1,500  metres  on  each  side 
of  the  wharf  in  question.  The  concession  was  afterwards 
transferred  to  General  Jose  Santos  Zelaya  himself  who 
in  1904  sold  it  to  the  Central  American  Commercial  C  >. 

On  March  14,  1912,  the  Executive  cancelled  the  con- 
cession, whereupon  the  company  presented  this  claim, 
the  principal  items  of  which  are :  $100,000  gold  which  it 
alleged  it  paid  for  the  concession,  $200,000  gold  as  the 
value  of  the  wharf  and  a  warehouse,  and  $l,2(,)o.onn  gold 
for  estimated  future  profits. 

On  November  19,  1914,  the  representatives  of  the 
parties  stated  that  they  had  agreed  upon  a  compromise 
according  to  which  the  company  obliges  itself  to  a  1  loa- 
the Government  ten  per  cent,  of  the  net  proceeds  of  the 
wharf;  to  deliver  the  wharf  to  the  Collector  General  of 


58 


Customs  for  administration  by  him ;  to  enlarge  the  ware- 
house on  the  wharf,  expending  $15,000  gold  thereon; 
to  pay  the  Government  $75,000  gold;  and  to  grant  the 
Government  of  Nicaragua  an  option  to  purchase  the 
wharf  and  the  rights  of  the  company,  at  any  time,  for 
$300,000  gold.  The  Government,  on  the  'other  hand, 
agreed  that  the  concession  remain  in  force  until  the  right 
to  purchase  were  exercised  according  to  the  option. 

The  Commission  approved  the  compromise,  but  stated 
that  such  approval  involved  no  decision  with  reference 
to  the  legality  or  illegality  of  the  concession. 

The  owners  of  the  lottery  concession  also  filed  a 
claim  which  is  numbered  5,030,  but  subsequently  with- 
drew it  as  will  be  seen  from  judgment  No.  5,891. 

2.  War  Claims. 

The  greater  portion  of  the  claims  received  by  the  Com- 
mission, 7,817  out  of  the  7,908  claims,  were  based  on 
damages  and  losses  suffered  in  consequence  of  wars,  be- 
cause of  the  carrying  off  of  cattle,  horses,  mules,  pigs, 
poultry,  saddles,  grain,  provisions  and  every  other  con- 
ceivable object  which  might  be  of  use  to  an  army,  the 
destruction  of  crops,  the  burning  of  houses  and  other 
similar  damages.  Almost  all  these  claims  were  filed  by 
Nicaraguan  citizens.  The  total  amount  claimed  for  war 
damages  was  C$4,301,319.57  and  the  amount  awarded 
C$974,664.43. 

The  laws  relating  to  the  Commission  conferred  juris- 
diction over  all  claims  which  originated  since  the  be- 
ginning of  the  administration  of  President  Zelaya.  The 
Commission  therefore  held  that  it  has  jurisdiction  over 
claims  which  arose  on  and  after  July  25th,  1893.  Claims 
were  presented  before  the  Commission  based  on  dam- 
ages suffered  during  the  following  wars  and  revolutionary 
disturbances : 

1893.  End  of  the  Revolution,  after  July  25th. 

1893    to  1894.  War  with  Honduras, 
t     1896.  Revolution  of  Leon. 


59 


1897.  Revolution  of  Granada  and  Jinotepe. 

1898.  Invasion  from  Costa  Rica. 

1899.  Revolution  of  Bluefields. 
1903.  Revolution  in  Chontales. 
1907.  War  with  Honduras. 

1909    tp  1910.  Revolution  of  Bluefields. 

1911.  Disturbances  of  May  8th. 

1912.  Revolution  of  July  29th. 

1913.  Disturbances  at  Nagarote. 

Also  in  other  years,  when  the  Republic  was  at  peace, 
there  were  governors  and  other  authorities  who  took 
from  private  persons  articles  necessary  for  the  army,  and 
claims  for  such  seizures  were  also  filed  with  the  Com- 
mission. 

In  practically  all  of  these  war  claims,  the  evidence 
consisted  either  of  receipts  given  by  the  corresponding 
authorities,  or  was  contained  in  depositions  rendered  be- 
fore local  magistrates  under  the  procedure  provided  for 
investigations  for  perpetual  memory  (informaciones  para 
perpetua  memoria).  The  Commission  has  reasons  for 
complaint  with  reference  to  both  kinds  of  evidence.  It 
became  clear  that  many  military  chiefs  and  some  civil 
authorities  issued  documents  without  ascertaining  whether 
the  party  in  interest  had  really  delivered  the  number  of 
animals  or  objects  expressed  by  the  document.  In  some 
cases  the  negligence  of  the  signer  of  the  document  was 
so  evident  and  so  serious  as  to  be  inexcusable. 

But  if  the  evidence,  by  means  of  receipts  and  signa- 
tures of  authorities,  was  not  entirely  satisfactory,  the 
depositions  of  witnesses  were  still  less  so.  In  such  pro- 
ceedings the  law  provides  that  the  petitioner  notify  the 
representative  of  the  Department  of  Public  Prosecution 
and  the  representative  of  the  Finance  Department,  so 
that  they  may  cross-examine  the  witnesses,  and  the  law 
further  requires  that  after  the  testimony  has  been  given 
these  officials  file  reports  thereon.  If  the  provisions  and 
the  intent  of  the  law  were  duly  observed,  the  right 
the  Government  would  be  well  protected.  In  fact,  how- 
ever, in  the  majority  of  cases,  the  notifications  of  the» 


60 


representatives  of  the  Government  and  the  reports  of 
these  officials,  were  a  farce.  With  a  few  honorable  ex- 
ceptions, the  representatives  of  the  Government  paid  no 
attention  to  the  notifications,  took  no  interest  in  ascer- 
taining whether  the  witnesses  had  testified  the  truth,  and 
afterwards  either  permitted  the  time  for  filing  their  re- 
port to  pass  or  gave  a  favorable  report,  however  exag- 
erated  the  claim  may  have  been.  The  Commission  begs 
to  call  the  Government's  attention  to  this  state  of  affairs. 

The  evidence  adduced  by  means  of  investigations  for 
"perpetual  memory,"  also  contained  other  deficiencies. 
In  general,  the  questions  asked  of  the  witnesses  were 
exceedingly  vague  and  the  witnesses  merely  answered 
affirmatively  without  giving  any  explanation.  Such  evi- 
dence was  far  from  convincing  the  Commission  of  the 
truth  of  the  matters  alleged  by  the  claimant.  When  the 
facts  had  been  admitted  as  true  by  the  local  Boards  of 
Exactions,  or  by  other  authorities  of  the  Government, 
the  Commission  also  generally  accepted  them.  But  in 
other  cases,  in  spite  of  the  ample  criterion  which  it  ob- 
served, it  was  obliged  to  make  great  reductions  in  the 
amount  claimed,  because  of  the  insufficiency  of  the  proof. 

In  studying  the  cases,  it  was  observed  that  many  claims 
were  based  on  losses  for  which,  according  to  the  rules  of 
international  law,  the  Government  should  not  be  con- 
sidered responsible.  In  some  cases  the  Boards  of  Ex- 
actions and  even  the  War  Department  had  acknowledged 
liability  for  such  losses.  Many  persons  made  claims  for 
damages  caused  by  the  projectiles  of  rifles  and  artillery 
during  battles,  and  there  were  many  claims  for  property 
stolen  during  the  war,  although  there  was  merely  a  sus- 
picion that  the  larceny  might  have  been  committed  by 
soldiers,  and  although  the  stolen  property  could  not  be 
used  for  military  purposes.  The  Commission  therefore 
at  the  beginning  of  its  sessions  adopted  various  funda- 
mental rules  with  reference  to  the  responsibility  of  the 
C.overnment,  and  these  rules  were  applied  to  the  facts  in 
t-.'icli  case.  This  method  of  procedure  is  the  principal 
.explanation  of  the  unanimity  observed  in  the  judgments 


61 

of  the  Commission.  Although  the  principles  announced 
slightly  relaxed  in  at  least  one  case  the  rules  of  interna- 
tional law,  relating  to  the  liability  of  the  Ciovernn 
they  were  considerably  more  rigid  than  the  principles 
heretofore  followed  in  Nicaragua.  The  rules  so  adopted 
were  as  follows  : 

"(1)  The  Government  is  not  responsible  for 
damages  suffered  during  a  battle,  or  as  a  direct 
consequence  of  military  operations." 

This  rule  was  applied  especially  in  the  claims  for  dam- 
ages suffered  in  consequence  of  the  battle  fought  at 
Pearl  Lagoon  on  July  27th,  1910,  the  bombardment  of 
Prinzapolka  also  in  the  year  1910,  the  bombardment  of 
Managua,  on  August  11  to  14,  1912,  and  the  bombard- 
ment and  battles  around  Masaya  during  the  same  war  of 
1912.  Nevertheless,  indemnity  was  granted  when  the 
damages  were  inflicted  maliciously  or  without  military 
necessity,  as  wrere  some  of  those  caused  by  the  garrison 
of  the  fortress  of  San  Francisco  in  Granada  in  the  final 
days  of  the  siege  in  August,  1910. 

"(2)  The  Government  is  not  responsible  for 
'lucro  cesante'  (unaccrued  or  uncollected  profits), 
or  indirect  damages  suffered  in  business  as  a  con- 
sequence of  war." 

The  number  of  claims  of  this  kind  was  greater  than 
expected.  During  the  war  of  1909  to  1910,  most  of  the 
military  operations  took  place  in  the  Department  of 
Chontales  and  many  cattle  ranches  had  to  be  abandoned 
for  months;  some  of  the  losers  afterwards  claimed  t he- 
value  of  the  cheese  which  they  would  have  made  with  the 
milk  they  would  have  obtained  had  there  been  no  war. 
Various  persons  claimed  the  amount  of  damages  they 
suffered  in  their  property  or  business  while  they  were  in 
the  army.  Others  claimed  the  value  of  their  horses  and 
also  the  profits  they  would  have  derived  if  their  horses* 


62 


had  not  been  taken.  Of  the  claimants  of  the  war 
19 IS,  there  were  several  who  asked  for  indemnity  for 
the  profits  they  failed  to  make  because  the  corn  and  other 
provisions  imported  by  them  were  detained  at  the  port 
of  Corinto  while  the  means  of  transportation  to  the  in- 
terior were  blocked  by  the  state  of  war,  or  for  the  value 
of  corn  and  other  grain  which  was  damaged  by  re- 
maining in  storage  in  consequence  of  the  state  of  war, 
or  for  the  value  of  the  extra  freight  they  were  obliged 
to  pay  because  steamers  were  unable  to  discharge  in 
Corinto.  A  number  of  individuals  made  claims  for 
"paralyzation  of  their  business  during  the  war."  It  is 
evident  that  if  indemnity  were  allowed  for  such  losses,  no 
treasury  would  be  rich  enough  to  make  payment. 

"(3)  The  Government  is  not  responsible  for 
thefts  committed  by  individuals  of  the  army  with- 
out the  knowledge  of  their  chiefs.  Nevertheless, 
such  responsibility  may  exist  if,  in  consequence  of 
unjustified  orders  of  the  chiefs,  the  owners  of  the 
property  were  obliged  to  abandon  it  and  leave  it 
exposed  to  being  stolen,  or  if,  after  the  thefts  were 
committed,  complaint  was  made  and  the  chiefs 
refused  to  make  the  proper  investigation." 

Many  claimants  believed  that  any  deed  done  by  any  in- 
dividual of  the  army,  although  it  might  be  a  crime  com- 
mitted in  contravention  of  all  laws  and  orders,  created 
liability  for  the  Government,  every  soldier  being  thus  con- 
verted into  a  fully  authorized  representative  of  the  Gov- 
ernment. The  result  was  that  claims  were  made  for 
jewelry,  articles  of  personal  adornment,  women's  cloth- 
ing and  many  other  objects  which  could  not  serve  for 
military  purposes  and  which  were  stolen  by  soldiers  or 
civilians  during  campaigns.  The  Commission  rejected 
such  claims  unless  it  was  proved  that  some  officer  had 
knowledge  of  the  depredations  and  did  not  try  to  avoid 
them,  which  unfortunately  happened  only  too  often.  In 
the  same  manner  the  Commission  as  a  general  rule  re- 


63 


jected  the  claims  for  looting  committed  by  ungovernable 
soldiery  in  the  capture  of  a  town.  For  damages  sulY 
during  the  looting  of  Masaya  on  October  4th,  I'.MM,  l.v?:> 
claims  were  filed  in  which  approximately  C$440. <MHU in 
was  claimed  and  for  the  looting  which  took  place  a  feu- 
days  before  in  Jinotepe  there  were  35  claims  which 
amounted  to  C$107,000.00.  For  the  reasons  set  forth 
in  judgment  No.  6581,  rendered  in  claim  No.  G137  of 
Juan  Marenco,  and  in  judgment  No.  7050,  in  claim  No. 
5914,  of  Claudio  Acevedo,  the  Commission  rejected  these 
claims. 

"(4)  In  case  of  the  taking  of  animals  or  ef- 
fects which  might  be  useful  to  the  army,  it  is  nec- 
essary, in  order  to  make  the  Government  responsi- 
ble, to  present  receipts  of  competent  officials  or 
chiefs,  or  prove  that  the  animals  or  effects  were 
taken  by  the  order  of  a  civil  authority  or  military 
chief.  Nevertheless,  if  the  fact  of  such  taking  of 
animals  or  effects  is  proved,  the  Commission  may 
award  damages  even  without  proof  of  superior 
orders  if  the  War  Department  or  the  Board  of 
Exactions  have  admitted  responsibility  on  the  part 
of  the  Government." 

In  trying  to  apply  this  rule,  the  Commission  was  beset 
with  difficulties.  In  many  cases  the  patrols  which  went 
out  to  capture  cattle  and  horses  were  composed  of  private 
soldiers  without  chiefs  and  who,  even  if  they  had  desired 
to  give  receipts,  could  not  have  done  so,  as  they  did  not 
know  how  to  write.  In  other  cases  the  chiefs  roughly 
refused  to  give  any  kind  of  receipt  or  paper,  and  at  times 
even  threatened  or  beat  persons  who  dared  to  ask  tor 
receipts.  On  many  occasions  all  the  employees  of  a 
plantation  were  imprisoned  and  the  troops  carried  off 
everything  they  found.  As  a  general  rule,  the  Nicaragnan 
armies  do  not  depend  upon  a  central  commissary  but 
support  themselves  with  whatever  they  can  find  in  the 
region  where  they  operate  and  thus  there  was  an  enor- 


64 

mous  number  of  claims  for  cattle  and  objects  taken  by 
the  army,  many  of  such  claims  being  filed  directly  with 
the  Commission  without  having  been  revised  by  Boards 
of  Exactions  or  the  War  Department.  In  practice  and 
in  order  to  avoid  injustice  to  many  poor  claimants,  the 
Commission  was  obliged  to  modify  its  rule  and  award 
indemnity  in  cases  where  it  was  probable  that  the  prop- 
erty taken  was  utilized  by  the  army,  even  though  there 
was  no  proof  of  superior  orders. 

"(5)  Save  in  exceptional  cases,  the  values  will 
be  accepted  which  are  stated  in  the  receipts  given 
by  military  providing  boards  (Juntas  Proveedoras 
Militares),  and  by  military  chiefs.  When  no 
value  is  stated,  the  following  prices,  adopted  by 
the  War  Department,  will  be  paid : 

Mean  Price, 

Pesos.  Pesos. 

Cows 50  to     80  50 

Steers,   bulls   and 

oxen    GO  to  120  80 

Horses    100  to  150  100 

Mules    200  200 

Saddles       (of 

dressed  leather)  20 

Saddles     (un- 
dressed leather)  10 
These  prices  may  be  varied  if  the  circumstances 

of  the  case  require  it." 

This  scale  of  prices  was  applied  by  the  Commission, 
as  it  had  been  applied  by  the  War  Department,  in  the 
case  of  the  exactions  of  the  war  of  1909  to  I'.Hn  and  of 
previous  \Y<-J  ialiy  with  respect  to  the  Department 

of  Chontales,  where  there  was  much  cattle.  In  other 
departments,  as  Granada,  Carazo  and  Mntagalpn,  where 
prices  were  higher,  that  circumstance  was  taken  into 
account.  For  the  Department  of  Bluefields  it  was  neces- 
sary to  adopt  an  entirely  different  list  of  prices  because 


65 

the  values  are  higher  in  said  department  and  arc  quoted 
in  silver  instead  of  national  paper  currency.  Tin-  list 
of  prices  applied  in  Bluefields  will  be  set  forth  in  treating 
of  the  war  claims  of  1009  to  1010.  When  the  war  <>f 
1912  broke  out,  the  value  of  everything  had  incn 
and  the  Commission  adopted  a  new  list  of  prices  which 
will  also  be  given  hereinafter.  As  already  stated,  the 
awards  of  the  Commission  were  expressed  in  cordobas, 
the  new  monetary  unit,  and  the  rate  of  exchange  fixed 
by  the  Government  was  applied,  namely,  1,2~>0  per  cent., 
or  $12.50  national  paper  currency  for  one  cordoba.  At 
this  rate  of  exchange  the  prices  applied  by  the  Commis- 
sion were  very  low,  but  not  more  so  than  the  prices  al- 
ready applied  by  the  War  Department.  The  result  was 
almost  the  same  as  paying  only  a  certain  percentage  of 
the  loss  in  each  case.  It  was  necessary  to  adopt  some 
provision  of  this  kind,  as  well  because  of  the  weakness 
of  the  evidence  as  because  of  the  enormous  number  of 
claims  and  the  high  amounts  claimed.  If  high  prices 
had  been  allowed  for  all  animals  and  objects,  there  was  no 
possibility  that  the  Government X:ould  ever  pay  the  entire 
debt.  There  were  few  complaints  on  account  of  the  val- 
uations made  by  the  Commission.  Poor  persons  who 
constituted  a  great  majority  of  the  claimants,  were  gen- 
erally glad  to  receive  anything  at  all  and  disposed  to  add 
another  sacrifice  to  the  many  they  have  made  for  their 
country.  Almost  the  only  persons  who  complained  were 
persons  in  affluent  circumstances  and  it  was  curious  to 
observe  that  the  richer  the  claimant  the  more  he  insisted 
on  being  paid  the  full  value  at  which  he  calculated  his 
losses.  The  most  serious  protests  came  from  several 
foreigners  who  had  become  rich  in  the  Republic  but  com- 
plained bitterly  because  the  Commission  took  off  a  few 
dollars  from  the  price  they  asked  for  their  horses  or  other 
animals. 

"(6)  The  Government  is  not  responsible  to  a 
soldier  for  arms  or  other  effects  taken  from  him 
in  case  of  capture." 


66 


"(7)  Indemnity  will  not  be  paid  for  the  taking 
of  arms  of  private  persons  unless  it  is  clearly 
proved  that  the  claimant  was  entitled  to  bear  or 
have  them." 

"(8)  The  Government  is  not  responsible  for 
damage  done  to  property  or  for  property  taken 
by  insurgents  in  revolutionary  uprisings  which 
were  unsuccessful." 

The  last  rule  was  applied  several  times  with  reference 
to  damages  caused  by  the  unsuccessful  revolution  of  1903 
and  by  other  revolutionary  disturbances  and  with  ref- 
erence to  the  claims  of  persons  who  demanded  that  the 
State  indemnify  them  for  all  the  expenditures  which  they 
incurred  during  many  years  in  their  efforts  to  overthrow 
President  Zelaya.  Such  claims  were  not  only  completely 
at  variance  with  the  principles  of  law,  but  their  payment 
would  have  been  a  dangerous  precedent  for  the  future. 
There  was  an  exception,  nevertheless,  with  reference  to 
the  damages  caused  by  the  insurgents  of  1912  to  the 
property  of  persons  who  remained  loyal  to  the  Govern- 
ment, because  the  Congress  of  Nicaragua  expressly  so 
provided  by  the  law  of  January  10th,  1913.  A  recog- 
nition of  such  claims,  however,  must  be  considered  as  a 
matter  of  grace.  There  was  also  an  exception  in  the 
case  of  the  damages  caused  by  the  insurgents  of  1896, 
as  the  national  assembly  so  provided  by  the  law  of  Feb- 
ruary 18th,  1910.  The  first  of  these  two  laws  can  be 
understood  because  the  idea  of  the  legislator  was  to  re- 
ward loyalty,  but  the  law  relating  to  the  war  of  189(> 
appears  completely  unjustifiable.  Nevertheless,  it  was 
necessary  to  apply  this  law,  because  the  Government  IKK! 
recognized  other  laws  of  the  Madriz  Congress,  because 
the  principal  claims  comprised  in  said  law  had  been  paid 
by  the  Madriz  administration,  and  because  only  a  few 
claims  of  this  kind  remained  to  be  settled. 

A  number  of  claimants  sustained  that  the  rules  of 
international  law  are  not  applicable  to  Nicaragua,  and 
especially  not  to  its  civil  contentions.  The  Commission 


67 

decided  that  the  rules  of  international  law  form  a  part  <>f 
the  body  of  laws  of  every  civilized  nation,  that  Mich  rtiU-s 
define  the  rights,  duties  and  responsibilities  of  Govern- 
ments  in  cases  of  foreign  war  or  invasion,  and  that  they 
are  also  of  general  application  to  civil  wars  e 
when  such  wars  attain  the  character  and  niagnitud. 
some  which  have  occurred  in  late  years  in  Nicaragua. 

The  war  claims  decided  by  the  Commission  'can  In- 
divided  into  three  classes : 

(a)  War  Claims  of  1893  to  100!). 

During  the  period  of  1893  to  1009,  there  were  a  num- 
ber of  civil  struggles  in  Nicaragua,  as  already  explained, 
but  it  was  the  custom  after  each  war  to  appoint  a  board 
of  claims  to  liquidate  the  debt  of  the  Government.  In 
this  manner  the  greater  part  of  the  claims  which  ai 
in  such  wars  had  already  been  paid,  or  converted  into 
documents  of  credit  against  the  State.  Only  a  few 
remained  and  of  these  many  belonged  to  persons  perse- 
cuted by  General  Zelaya  and  who  had  therefore  been  un- 
able to  present  them  at  the  proper  time.  As  the  law 
creating  the  Commission  gave  it  jurisdiction  over  all 
claims  which,  from  any  cause  whatsoever,  may  have 
arisen  against  the  Government  of  Nicaragua  from  the 
beginning  of  the  administration  of  President  Zelaya, 
the  Commission  also  accepted  the  said  war  claims.  In 
many  of  these  cases  the  amount  claimed  was  very  high 
and  the  evidence  very  weak.  One  hundred  and  eighty- 
one  claims  were  filed,  asking  for  the  payment  of  C$7  .">"».- 
019.62,  and  in  which  C$73,194.65  was  awarded. 

(b)  War  Claims  of  1909  to  1910.      . 

The  last  revolution  against  the  Government  of  Zelaya 
began  in  Bluefields  on  October  llth,  1909,  continued 
against  Zelaya's  successor,  Madriz,  and  terminated  with 
the  triumph  of  the  revolutionists  about  the  end  of  Aug- 
ust, 1910.  It  caused  losses  in  greater  or  less  amount  in 


68 


all  parts  of  the  country,  and  especially  desolated  the  east 
coast,  the  Department  of  Chontales  and  the  country  about 
Granada.  The  law  of  October  14th,  1911,  provided  that 
the  Commission  have  jurisdiction  over  claims  filed  on 
account  of  the  belligerent  operations  of  both  factions. 
It  also  expressly  directed  the  Commission  in  its  con- 
sideration of  claims,  to  give  precedence  to  claims  arising 
out  of  military  loans,  requisitions  or  exactions,  by  either 
faction  during  the  said  civil  war. 

In  December,  1910,  the  Government  had  already  estab- 
lished "Boards  of  Exactions"  in  the  various  departments, 
before  which  claims  for  damages  suffered  during  the  civil 
war  were  to  be  presented.  The  Boards  examined  the 
claims  and  proofs  and  rendered  judgment,  after  which 
all  the  papers  were  sent  to  the  War  Department  which, 
in  many  cases,  reviewed  the  evidence  and  rendered  judg- 
ment anew.  Towards  the  end  of  1911  and  in  the  begin- 
ning of  1912,  all  these  claims  were  referred  to  the  Mixed 
Commission  for  study  and  final  decision.  The  double 
examination,  which  many  claims  had  thus  undergone  in 
the  Boards  of  Exactions  and  the  War  Department,  was 
of  great  assistance  to  the  Commission,  but  it  was  to  be 
observed  that  the  local  Boards  were  somewhat  generous 
in  their  awards  and  had  not  taken  into  account  that 
similar  claims  were  made  against  the  Government  in  all 
parts  of  the  country.  The  Boards  gave  certified  copies 
of  their  awards  to  the  parties  in  interest,  a  procedure 
which  produced  great  confusion  as  a  large  number  of 
persons  believed  these  certifications  to  be  copies  of  final 
awards,  and  there  are  reasons  to  believe  that  even  certain 
offices  of  the  Government  have  accepted  such  documents 
supposing  them  to  be  legal  documents  of  credit  against 
the  State. 

In  conformity  with  the  law  of  October  1  1th,  11M1,  the 
Commission,  in  its  study  of  claims,  gave  preference  to 
those  of  the  war  of  1909  to  1910,  and  as  they  were  about 
:>.:;;:»  in  number,  the  first  two  years  of  the  Commission 
were  dedicated  almost  exclusively  to  these  claims.  The 
(  majority  were  very  small  claims,  the  total  claimed  being 


69 

C$1,495,776.82  and  the  total  amount  awarded 
7'0;J.17.      There    were    several    claims    of    only    tuent\ 
four   cents,   but  there    were    others    of     thousand 
COrdobas.      In   making   valuations    <>f    losses,    the    pi 
above  indicated  were  generally  applied.     In  the  DC] 
inent  of   Minefields,  it  was  necessary  to  make 
price  list  for  the  reasons  already  explained.     The  values 
awarded  for  losses  in  Bluefields  were  as  follows  : 


Silver. 

Horses    ......................  .Slno.OO 

Mules    .......................  i  ;,().o() 

Cows  ........................  ;,().(io 

Fresh  cows  ...................  60.00 

Oxen  ...............  .  ........  »;().<  H.I 

Saddles  ......................  55.00 

Pigs  .........................  30.00 

Chickens  .....................  1.00 

Oars    ........................  1.00 

Boats,  10       yds.  long  ..........  100.00 

$y2  yds.  long  lyd.    wide.  80.00 

9       yds.  long,  lyd.   wide.  80.00 

8       yds.   long,  1  yd.  wide.  SO.on 

7       yds.  long,  lyd.  wide.  45.00 

6%  yds.  long,  1  yd.  wide.  45.00 

5       yds.  long,  lyd.   wide.  30.00 

yds.  long,  lyd.  wide.  :!n.nn 


In  the  case  of  better  boats,  the  prices  were  increased 
by  about  25  per  cent.     The  rate  of  exchange  bei\ 
silver  and  cordobas,  as  applied  by  the  Commission  was 
250  per  cent.  ;  that  is,  $2.50  silver  was  taken  as  equiva- 
lent to  one  cordoba. 

The  claims  for  damages  suffered  during  the  war  of 
1909  to  1910,  took  up  more  time  of  the  Commi- 
than  all  other  claims  together. 

(c)   War  Claims  of  1912. 


70 


The  civil  war  which  broke  out  July  29th,  1912,  was 
one  of  the  most  violent  and  disastrous  wars  that  have 
desolated  the  Republic.  It  affected  the  most  populous 
and  developed  departments  of  the  country,  comprised 
various  important  bombardments,  battles  and  assaults, 
and  caused  much  damage  until  its  termination  by  the 
triumph  of  the  Government  in  the  beginning  of  October, 
1912. 

This  war  brought  the  Commission  new  claims  which 
could  not  have  been  foreseen  when  the  tribunal  was 
formed.  The  greater  part  of  them  were  based  on  seiz- 
ures, damages  and  losses  caused  by  the  armies  of  the 
Government.  Some  were  founded  on  damages  caused 
by  the  insurgents,  but  such  claims  were  rejected  by  the 
Commission  unless  it  appeared  that  the  provisions  of 
the  law  of  January  10th,  1913,  were  applicable. 

In  many  claims  filed  with  the  Commission,  great  ex- 
aggeration was  to  be  observed,  as  was  natural,  but  in 
the  claims  of  1912,  the  exaggeration,  as  well  with  ref- 
erence to  the  losses  themselves  as  to  their  value,  ap- 
peared greater  than  in  other  claims.  The  number  of 
cases  in  which  attempts  were  made  to  deceive  the  Com- 
mission with  completely  unfounded  claims,  was  relatively 
small,  at  least  as  far  as  the  Commission  knows,  but  the 
attempts  at  fraud  which  were  discovered,  were  more 
numerous  in  the  claims  of  the  war  of  1912  than  in  other 
claims. 

When  the  war  of  1912  began,  all  prices  had  risen, 
and  the  Commission  was  obliged  to  adopt  a  new  price 
list  for  the  losses  suffered  in  this  war.  The  list  adopted 
as  a  guide  was  as  follows : 

Horses   .  ..C$16.00 


Mares 
Mules    .  . . 
Cows 

Bulls  .... 
Draft  oxen 
Pigs 


16.00 

32.00 

8.00 

8.00 

24.00 

4.00 


71 


Chickens    .24 

Turkeys 40 

Saddles  of  dressed  leather l.oo 

Saddles  of  undressed  leather  ....         l.r.n 

Large  mounted  saddles KJ.no 

Smaller  saddles 1  :J 

Bridles l.r.n 

Halters    .08 

Spurs  ,16 

Ropes ,12 

Pack  saddles l.->o 

Cheese,  per  pound .  K'» 

Maize,  per  fanega 4.00 

Beans,  per  fanega t,80 

Spur  straps  .08 

Ox  carts    20.00 

As,  in  the  case  of  the  other  lists,  these  prices  were 
subject  to  increase  when  it  was  proved  that  the  animals 
or  objects  were  of  better  quality. 

Many  claims  of  the  war  of  1912  were  based  on  1< 
ing  committed  by  the  Government  forces  in  Masa\a 
and  Jinotepe  or  by  the  insurgent  forces  in  Leon,  Chin- 
andega,  Diriamba,  Jinotepe  and  Santa  Teresa.  As  al- 
ready explained,  such  claims  were  rejected  unless  spe- 
cial circumstances  were  proved  such  as  the  consent  <>f 
superior  officers,  etc. 

The  number  of  claims  of  the  war  of  11)12  amounted  t<» 
about  2,257,  in  which  the  sum  of  C$2,n:,n. :>•>:>,.  11  was 
claimed  and  the  Commission  awarded  the  sum  of  C$  1 
7V»r».6.1.  If  it  had  not  been  for  the  paralyzation  of  our 
work  by  the  said  war,  and  the  multitude  of  new  claims 
to  which  the  war  gave  rise,  it  is  probable  that  the  Com- 
mission would  have  concluded  its  labors  a  year  ;i 

3.  Claims  for  Denial  of  Justice. 

A  number  of  claims  filed  with  the  Commission  v 
based  in  whole  or  in  part  on  alleged  denial  of  justice* 


72 


by  the  courts  or  authorities  of  the  Republic.  The  most 
important  case  of  this  class  was  that  of  Federico  Alva- 
rado,  case  No.  3,  judgment  No.  2010.  No  claim  of  this 
kind  was  sufficiently  proven  and  they  were  all  rejected, 
with  the  exception  of  case  No.  6374,  judgment  No. 
6536,  in  which  a  small  sum  was  awarded  for  unlawful 
imprisonment. 

4.  Miscellaneous  Claims. 

Besides  the  claims  for  cancellation  and  violation  of 
concessions  and  contracts,  the  war  claims,  and  claims 
for  denial  of  justice,  other  claims  were  filed  based  on 
every  conceivable  ground.  Many  alleged  illegal  or  arbi- 
trary acts  committed  by  the  authorities  of  the  Govern- 
ment of  Zelaya.  Other  claims  were  presented  for  ex- 
pulsion from  the  country,  others  for  confiscation  or  il- 
legal seizure  of  properties,  others  for  death  illegally 
caused  by  agents  of  the  Government,  others  for  customs 
bonds  and  other  documents  of  credit  issued  by  authorities 
of  the  Government,  others  for  false  imprisonment,  others 
for  services  rendered  to  the  present  or  former  Govern- 
ments, one  for  violation  of  a  concordat  with  the  Holy  See, 
etc. 

In  very  many  cases,  it  happened  that  a  single  claim 
comprised  the  most  diverse  items.  Occasionally  claim 
was  made  for  damages  suffered  in  various  wars,  for  arbi- 
trary acts  of  authorities,  for  money  lent  the  Govern- 
ment, and  for  other  causes.  The  Commission  has,  there- 
fore, in  view  of  its  lack  of  resources  and  time,  and  its 
small  office  force,  been  unable  to  make  exact  statistics 
of  its  work.  For  this  reason,  when  a  claim  comprises 
more  than  one  item,  it  has  been  classified  according  to 
the  nature  of  its  most  important  item. 

IX.  PAYMENTS  MADE  BY  THE  COMMISSION. 

During  the  greater  part  of  the  existence  of  the  Com- 
1  mission,  the  position  of  its  members  has  been  embar- 


73 

rassing,  because  of  the  lack  of  funds  to  pay  judgments. 
In  October,  1913,  the  Government  in  contracting  a  small 
loan  in  New  York,  was  able  to  make  arrangement 
the  payment  of  some  of  the  smaller  judgments.  In  the 
agreement  it  was  provided  that  the  sum  of  CSloo.nuo.on 
and  20  per  cent,  of  the  customs  receipts  of  November, 
1913,  be  set  apart  for  the  payment  of  awards  of  the 
Commission  of  C$100.00  or  less.  It  was  also  agreed 
that  20  per  cent,  of  the  customs  receipts  of  the  months 
of  December,  1913,  and  January  and  February,  HH-I, 
be  set  aside  for  the  payment  of  awards  of  the  Commis- 
sion, without  limitation  as  to  amount.  In  the  beginning 
of  1914,  the  agreement  was  modified  and  it  was  pro- 
vided that  after  the  month  of  January  the  said  20  per 
cent,  should  no  longer  be  set  aside  for  the  awards  of  the 
Commission. 

The  twenty  per  cent,  of  the  customs  receipts  of  No- 
vember amounted  to  C$17,153.86,  which,  with  the  sum 
of  C$100,000.00  made  available  by  the  loan,  gave  a  fund 
of  C$117,153. 86  for  the  payment  of  awards  of  the  Com- 
mission of  one  hundred  cordobas  or  less.  The  twenty 
per  cent,  of  the  customs  receipts  of  December,  11)13,  and 
January,  1914,  amounted  to  C$41,394.14,  which  con- 
stituted the  fund  for  the  payment  of  awards  of  the  Com- 
mission without  limitation  as  to  amount.  The  total  sum 
thus  obtained  available  for  the  payment  of  awards  was 
C$158,548.00. 

The  Commission  endeavored  to  pay  only  small  claims 
where  the  awards  amounted  to  one  hundred  cordobas  or 
less,  and  for  this  purpose  utilized  not  only  the  fund  which 
expressly  designated  such  limitation,  but  also  the  other 
fund  for  awards  without  limitation  as  to  amount.  Jn 
82  cases  persons  who  had  received  awards  of  some- 
thing over  one  hundred  cordobas  and  who  did  not  wish 
to  wait,  appeared  before  the  Commission  requesting 
that  such  judgment  be  reduced  to  one  hundred  cordobas 
in  order  that  payment  might  be  made  at  once,  and  the 
Commission  acceded  to  the  requests,  the  total  amount 
thus  renounced  being  C$2,676.89.  There  were  also  cases* 


74 


in  which  more  than  one  hundred  cordobas  had  been 
awarded  and  in  which  the  claimants  were  very  poor  or 
special  circumstances  existed,  wherefore  the  Commission 
ordered  that  payment  be  made  in  full  of  some  of  these 
awards;  at  first,  such  payments  were  made  only  in  very 
exceptional  cases,  but  later  when  the  end  of  the  Com- 
mission drew  near,  a  more  ample  rule  was  followed. 
In  two  cases  of  awards  of  over  one  hundred  cordobas, 
the  claimants  made  a  reduction  in  their  awards  for  the 
purpose  of  obtaining  immediate  payment,  the  amount 
thus  renounced  being  C$111.00.  The  total  number  of 
payments  of  awards  of  one  hundred  cordobas  and  less 
is  4,527,  the  amount  paid  being  C$140,147.82.  The 
total  number  of  awards  of  over  one  hundred  cordobas, 
paid  by  the  Commission  is  91  and  the  amount  paid  there- 
on C$17,552.95.  That  is  to  say  the  Commission  has  paid 
a  total  number  of  4,618  claims  and  the  total  amount  of 
such  payments  is  C$157,700.77. 

Inasmuch  as  there  were  reductions  in  84  cases,  in 
which  the  claimants  renounced  C$2,787.89,  the  full  value 
of  the  awards  paid  was  C$160,488.66. 

When  the  payments  began,  the  Commission  was  under 
the  impression  that  the  National  Bank,  where  the  money 
was  deposited,  would  allow  interest  on  the  same,  but  after 
several  months  it  was  notified  that  the  bank  would  not 
allow  interest,  but,  on  the  contrary,  would  deduct  from 
the  amount  set  aside  a  commission  for  its  services.  For 
this  reason  we  have  not  been  able  to  draw  up  to  the 
last  cordoba  of  the  sum  reserved  for  payments.  The  sum 
so  reserved  amounted  to  C$158,548.00,  and  the  net 
amount  drawn  to  C$157,700.77,  a  balance  of  C$847.23, 
thus  remaining  for  commissions  of  the  bank  in  accord- 
ance with  the  accounts  which  the  bank  will  have  to  render 
to  the  Government. 

In  many  cases  there  was  more  than  one  claimant,  and 
therefore  while  the  number  of  claims  paid  was  4,618, 
the  number  of  claimants  was  4, (».">:). 

In  making  payments,  it  became  necessary  to  adopt  a 
<»very  complicated  procedure.  The  funds  available  had 


75 


been  deposited  to  the  order  of  the  Minister  of  Finance, 
and  the  National  Bank  received  instructions  to  pay  eh- 
drawn  by  the  Minister  of  Finance  on  the  warrant  of  tin- 
President  of  the  Mixed  Claims  Commission,  there  beini; 
attached  to  the  warrant  a  certification  of  the  dispositive 
part  of  the  judgment  of  the  Commission,  signed  by  the 
Secretary  of  the  Commission,  and  countersigned  by  the 
President.  In  practice  a  difference  of  opinion  arose  be- 
tween the  Department  of  Finance  and  the  National  I'.ank, 
each  insisting  on  retaining  in  its  files  the  certified  o 
which  served  as  vouchers.  If  the  Mixed  Commission 
had  waited  for  a  settlement  of  the  dispute,  several  months 
would  probably  have  elapsed  without  making  any  pay- 
ments, and  in  the  meantime  our  offices  were  besieged  by 
poor  claimants  who  clamored  for  their  money,  and  other 
persons  who  were  not  careful  to  ascertain  the  facts,  be- 
gan to  make  unjust  criticisms.  It  was  therefore  neces- 
sary to  accede  to  the  desires  both  of  the  Department  and 
of  the  bank,  and  give  vouchers  to  each.  The  procedure 
was  as  follows :  periodically  warrants  were  sent  to  the 
Department  of  Finance,  the  warrant  comprising  a  certain 
number  of  judgments  and  being  accompanied  by  a  cer- 
tified copy  of  each;  the  Minister  of  Finance  then  issued 
a  check  in  favor  of  the  Commission  for  the  amount  of 
the  warrant;  the  Commission  endorsed  the  check  to  the 
National  Bank,  and  sent  it  to  the  bank  with  a  copy  of 
the  warrant  and  a  certificate  of  the  dispositive  part  of 
each  of  the  judgments;  and  thereupon  the  Commission 
issued  checks  in  favor  of  the  respective  claimants  de 
nated  in  the  warrant.  It  will  be  observed  that  a  triplica- 
tion of  vouchers  thus  became  necessary :  (a)  the  vouchers 
sent  to  the  Department  to  justify  the  warrant;  (b)  the 
vouchers  sent  to  the  bank  to  make  the  money  available; 
(c)  the  checks  and  receipts  which  will  prove  that  the 
payments  were  actually  made.  Such  a  multiplication  of 
work  had  a  result  contrary  to  the  one  desired,  because  it 
gave  rise  to  more  errors  than  would  probably  have  oc- 
curred under  a  simpler  system. 

The  greater  number  of  the  checks  issued  in  favor  »>f» 


76 


claimants  were  delivered  to  them  in  the  office  of  the  Com- 
mission in  Managua,  but  others  were  distributed  by  mem- 
bers of  the  Commission  in  Granada,  Masaya,  and  Leon, 
others  were  forwarded  to  different  governors  of  de- 
partments to  be  delivered  to  their  owners,  and  those  of 
the  east  coast  were  sent  to  the  Collector  of  Customs  of 
Bluefields,  Mr.  I.  A.  Lindberg,  who  kindly  consented  to 
distribute  them.  In  the  Department  of  Chontales  there 
were  more  than  a  thousand  claimants  who  lived  in  remote 
regions  where  there  was  no  facility  for  exchanging 
checks;  the  Commission  therefore  sent  a  paymaster  to 
said  Department  with  C$22,465.78,  to  pay  the  claim- 
ants designated  in  a  long  list.  The  paymaster  went  to 
Juigalpa,  the  capital  of  the  Department,  paid  C$21,- 
099.27,  and  returned  to  Managua  to  render  accounts  and 
return  the  balance  C$1,366.51  to  the  Commission.  This 
was  the  only  occasion  on  which  any  part  of  the  money 
was  in  the  office  of  the  Commission,  and  after  the  pay- 
ment of  C$1,001.48  to  claimants  who  had  arrived  too 
late  in  Juigalpa  the  balance  was  returned  to  the  bank. 
A  check  was  also  issued  to  the  governor  and  administra- 
tor of  San  Juan  del  Norte,  for  the  payment  of  the  small 
number  of  claimants  at  that  place,  as  there  were  no  bank- 
ing facilities  which  would  make  individual  checks  pos- 
sible; and  in  the  same  manner  a  check  was  issued  in 
favor  of  Mr.  Lindberg  for  the  payment  of  various  In- 
dians in  the  district  of  Cape  Gracias  a  Dios.  On  the 
16th  of  November,  1914,  a  sum  of  C$622.98  remained 
pending  for  the  payment  of  28  claimants,  almost  all  per- 
taining to  the  last  warrant;  for  this  sum  the  correspond- 
ing checks  were  prepared  for  such  claimants  as  might 
appear  before  the  date  of  this  report,  and  the  remainder 
will  be  delivered  to  the  secretary  of  the  Commission  to 
make  payment  and  render  accounts  to  the  Department 
«»f  Finance.  With  the  exceptions  noted,  all  payments 
«»i"  the  Commission  were  made  by  means  of  checks  in 
favor  of  the  claimants  or  their  representatives. 

When  checks   were   delivered   the   signatures   of   the 
^claimants  were  required  on  the  stub  of  the  check,  or  on 


77 


special  receipts  when  delivery  was  made  by  mean 
ernors  or  other  functionaries.     As  many  claimants  lived 
in  remote  regions,  and  have  changed  their  place  <>f 
dence,  and  up  to  the  last  moment   it   was  necessary  1<> 
forward  checks  by  mail,  it  is  possible  that  tht  : 
still  be  several  checks  undelivered.     As  to  these  also  the 
secretary  of  the  Commission  will  make  report.     In  con- 
nection with  the  cash  payments  made  in  Chontalcs  and 
elsewhere,  the  signatures  of  the  paymasters  were  required 
as  well  as  the  receipt  of  the  claimants.    The  only  receipts 
of  this  kind  which  are  still  lacking  are  those  of  ; 
of  C$1,407.50,  for  the  Indians  in  the  forests  of  the  Dis- 
trict of  Cape  Gracias  a  Dios,  and  these  receipts  will  be 
presented   within   a   reasonable   time   or  the  money   re- 
turned.   All  receipts  given  for  checks  or  cash  have  been 
attached  to  the  respective  cases. 

The  best  vouchers  to  prove  the  payment  of  awards 
for  which  checks  were  issued  will  be  the  checks  them- 
mission  has  had  no  accounting  with  the  bank  because 
have  to  render  account  to  the  Government.  The  Com- 
mission has  had  no  accounting  with  the  Bank  becan-e 
checks  were  being  issued  up  to  the  last  moment  and  be- 
cause several  checks  issued  some  time  ago  have  not  yet 
been  presented  for  payment. 

Inasmuch  as  on  this  date  there  are  still  several  checks 
undelivered  and  others  not  presented  for  payment,  and 
as  no  accounting  has  been  possible  between  the  bank 
and  the  Commission,  we  recommend:  (a)  that  the 
retary  of  the  Commission  be  allowed  a  term  of  a  few 
\veeks  more  to  find  and  pay  the  claimants  for  whom  the 
amount  of  their  awards  has  been  set  aside;  (b)  that  the 
Government  agree  with  the  National  Bank  to  wait  a 
reasonable  time,  for  example,  until  May  1st,  1  !)!.">.  for 
the  presentation  of  all  checks  which  are  lacking,  after 
which  date  an  accounting  is  to  be  had  between  the  Gov- 
ernment and  the  bank,  and  the  bank  is  to  return  to  the 
Government  the  entire  balance  remaining  of  the  funds 
for  the  payment  of  awards  of  the  Mixed  Commission,  and 
(c)  that  upon  the  return  of  the  balance  by  the  bank 


78 

to  the  Government,  the  latter  order  that  in  the  accom- 
paying  list  of  payments  made  and  in  the  summary 
of  cases  and  awards  of  the  Commission,  all  annotations 
be  cancelled  which  refer  to  the  payment  of  judgments 
whose  amount  should  be  found  not  to  have  been  collected 
from  the  bank. 

In  effecting  the  payments  the  Commission  met  with 
.special  difficulty  because  of  (a)  the  excessive  number  of 
persons  claiming  very  small  amounts;  (b)  the  fact  that 
the  majority  of  claimants  lived  in  remote  regions;  (c) 
the  complicated  procedure  for  obtaining  and  disbursing 
the  money;  (d)  the  lack  of  competent  employees,  and 
(e)  the  fact  that  the  Commission  had  neither  organiza- 
tion, facilities  nor  time  for  this  work.  Even  before  be- 
ing charged  with  making  payments,  the  Commissioners 
and  the  office  force  were  overwhelmed  with  the  work  con- 
nected with  the  study  of  claims  and  drafting  judgments, 
and  the  additional  task  of  making  payments  has  been 
arduous,  has  consumed  valuable  time  and  has  given  rise 
to  many  annoyances. 

X.  PAYMENT  OF  THE  REMAINING  AWARDS. 

With  this  report  a  list  is  submitted  of  all  the  awards  of 
the  Commission,  and  a  list  of  the  cases  paid  by  the  Com- 
mission in  the  respective  warrants.  From  these  lists  and 
from  the  register  of  cases  of  the  Commission,  as  also 
from  the  papers  in  the  various  cases,  it  will  be  easy  to 
see  which  cases  are  still  unpaid.  When  it  comes  to  pay- 
ing these  awards,  it  will  be  advisable  to  make  use  of  the 
services  of  the  secretary  of  the  Commission,  Mr.  Bolaiios, 
who  is  well  acquainted  with  the  details  of  the  Commis- 
sion's work. 

Various  claimants  have  requested  certificates  of  their 
awards  and  the  Commission  is  advised  that  some  of  these 
certificates  have  been  sold  to  third  parties.  Although 
such  documents  should  not  be  considered  as  documents 
of  credit  against  the  State,  it  will  be  advisable,  in  order  to 
ravoid  complaints  and  claims  in  the  future,  to  require  all 


79 

persons  holding  such  certificates  to  present  them  by  a  cer- 
tain date  before  payment  is  made. 

Also  when  payments  are  made,  the  Commission  nrom- 
mends  that  a  time  be  fixed  within  which  every  claimant 
should  appear  to  receive  what  is  due  him,  losing  his  rights 
in  case  of  non-appearance. 

Further,  before  making  new  payments,  it  will  be  ad- 
visable for  the  Government  carefully  to  revise  the  list 
of  unpaid*  claimants,  in  order  to  see  whether  any 
have  been  paid  from  the  general  treasury.  The  Minister 
of  Finance  has  notified  us  that  in  this  way  the  awards 
made  in  eight  cases  were  paid,  amounting  to  C$3,sl:2..Vj. 
but  the  Commission  has  information  that  several  claims 
were  paid  without  advising  us,  as  for  instance,  in  cases 
No.  1499,  16.r/,  2759  and  2760,  in  which  the  awards 
amounted  to  C$1,991.00. 

XL  RECORDS  OF  THE  COMMISSION. 

The  records  of  the  Commission  comprise : 

(a)  Register  of  Cases  and  Judgments. 

(b)  Docket  of  Cases. 

(c)  Register  of  Judgments,  or  Book  of  Awards. 

(d)  Record  of  Proceedings. 

(e)  Papers  filed  in  the  7,911  cases. 

(f)  Letters,  accounts  and  other  documents. 

These  records,  as  well  as  the  furniture  of  the  Com- 
mission, will  be  left  with  Commission  Dr.  Carlos  Cuadra 
Pasos,  who  will  deliver  them  to  the  official  designated 
by  the  Executive.  The  various  cases  with  the  documents 
pertaining  thereto  are  filed  in  the  order  in  which  judg- 
ments were  rendered.  Up  to  the  present  time  the  office 
force  has  been  busy  with  the  regular  work  of  the  Com- 
mission and  has  had  little  opportunity  for  placing  the 
archives  in  definite  order.  The  Commission  recommends 
that  in  order  to  facilitate  the  work  of  the  Government 
in  the  future,  such  employees  of  the  Commission  as  may 
be  necessary  be  retained  until  January  31st,  ll»l :,.  in  order 
to  label  properly  the  bundles  of  papers  and  in  order  to 
prepare  a  complete  index  of  all  cases. 


80 
XII.  CONCLUSION. 

In  fulfilling  the  task  entrusted  to  it,  the  Commission  has 
tried  to  act  with  the  strictest  impartiality,  deciding  each 
case  according  to  the  evidence  presented  and  according 
to  the  rules  of  law  and  of  equity.  We  are  pleased  to 
state  that  in  our  efforts  to  this  end  we  have  constantly 
received  the  support  of  the  Government  of  Nicaragua. 
We  desire  to  express  to  your  Excellency  and  to  the  of- 
ficials of  the  Government,  our  sincere  thanks  for  the 
encouragement  and  co-operation  given  to  us,  and  for 
the  proofs  of  friendship  and  kindness  which  we  have 
always  received  from  your  Excellency  and  all  other  of- 
ficials, even  in  the  darkest  days  which  Nicaragua  has  seen 
in  the  last  few  years.  We  hope  that  this  beautiful  country 
may  soon  emerge  from  its  difficulties  and  enter  upon 
the  enjoyment  of  the  happiness  and  prosperity  to  which 
its  resources  entitle  it. 

With  great  respect,  we  have  the  honor  to  be,  Mr.  Presi- 
dent, your  faithful  servants, 

OTTO  SCHOENRICH, 
CARLOS  CUADRA  PASOS, 
ARTHUR  R.  THOMPSON. 

The  following  appendices  are  attached : 

Appendix  I.  Laws  referring  to  the  Mixed  Claims  Com- 
mission and  Rules  of  Procedure  of  the  Commission. 

Appendix  II.  List  of  Judgments  rendered  by  the 
Nicaraguan  Mixed  Claims  Commission,  showing  pay- 
ments made. 

Appendix  III.  Accounts  of  payments  made  by  the  Nic- 
araguan Mixed  Claims  Commission. 


EXHIBIT  No.  2 
ENGLISH  TRANSLATION 


LETTER  OF  ACKNOWLEDGMENT 


ADDRESSED  BY 


SR.  DON  ADOLFO  DIAZ,  PRESIDENT  OF  NICARAGUA 


TO 


OTTO  SCHOENRICH,  PRESIDENT  OF  THE 

NICARAGUAN  MIXED  CLAIMS 
COMMISSION. 


83 

(Translation) 

Private  Correspondence 
of  the  President 

of  the  Republic. 
Managua,  Nicaragua,  C.  A. 

MANAGUA,  November  rj.'id,   11H  i. 
MR.  OTTO  SCIIOK. XKK-H. 

City. 
VERY  DEAR  SIR  AND  FRIEND  :— 

Upon  your  departure  from  this  country,  where  you 
are  so  kindly  remembered,  because  of  your  dedication  of 
all  your  faculties  to  the  service  of  Nicaragua,  1  desire  to 
give  you,  in  writing,  my  enthusiastic  testimony  nf  what 
the  work  of  the  Mixed  Claims  Commission,  of  which 
you  are  the  worthy  President,  has  signified  for  the  welfare 
of  the  Republic. 

The  Government  over  which  I  preside  included  in  its 
program  the  formation  of  a  tribunal,  mixed  because  of 
the  nationality  of  the  judges  who  were  to  constitute  it, 
in  order  that,  with  a  guarantee  of  impartiality  for  all. 
we  might  be  permitted  to  cancel  onerous  concessions 
granted  to  foreigners  by  former  governments,  and  to 
decide  numerous  claims  arising  from  such  cancellations 
and  from  the  damages  caused  by  our  civil  wars,  to  na; 
and  foreigners.  Today  this  most  important  point  of 
its  program  has  been  carried  out  to  the  entire  satisfaction 
of  the  Government,  the  happy  conclusion  of  the  same 
being  due,  in  a  great  measure,  to  the  competence  and  hon- 
« ^ability  of  the  judges  who  constituted  the  tribunal. 

The  justice  and  equity  with  which  the  Mixed  0 
mission  proceeded  in  all  its  resolutions  is  generally  recog- 
nized, and  it  should  be  a  matter  of  special  satisfaction  io 
you  that,  among  so  many  claimants,  not  one  has  com- 
plained to  the  Government  against  the  judgment  which 
decided  his  claim. 

I  further  desire  to  thank  you  for  other  services  y< >u 
have  rendered  to  my  Government,  which  has  found  you 


84 


ready  to  assist  with  your  learning  and  good  judgment, 
counselling  the  administration  whenever  requested  for 
the  decision  of  important  matters.  In  these  you  have 
worked  side  by  side  with  us,  disinterestedly  and  as  if 
you  were  a  Nicaraguan. 

With  special  pleasure  I  also  take  advantage  of  this  op- 
portunity to  manifest  to  you  the  general  good  will  which 
is  felt  towards  you,  personally,  in  Nicaragua,  and  the 
sentiments  of  my  friendship,  together  with  my  wishes  for 
your  happy  return  to  your  country,  where  you  will  surely 
find  the  personal  prosperity  which  you  deserve. 

With  high  esteem,  I  am, 

Your  very  obedient  servarit  and  friend, 

ADOI^FO  DIAZ. 


